Oral
Answers to
Questions

TREASURY

The Chancellor of the Exchequer was asked—

Economic Growth

Martin Vickers: What steps he is taking to support economic growth outside London and the south-east.

Philip Hammond: Creating an economy that works for all is a key priority of this Government. All regions are benefiting from the £12 billion local growth fund, and our industrial strategy will boost sustainable economic growth across the UK. Devolution deals are giving areas the tools they need to make the right economic decisions. We are supporting the northern powerhouse and the midlands engine, and we are investing more than £100 billion in infrastructure across the UK over the course of this Parliament.

Martin Vickers: I thank the Chancellor for his reply and am encouraged by it, but there has always been a feeling in northern Lincolnshire that we are somewhat peripheral from the northern powerhouse and that the focus has been too much on Leeds and Manchester. Could he reassure us that that is not the case? North East Lincolnshire Council has a number of innovative regeneration projects in process. Will he or one of his team agree to meet a delegation from north-east Lincolnshire in order to pursue them?

Philip Hammond: I reassure my hon. Friend that that is not the case. North-east Lincolnshire is very much a focus of the Government’s attention. We have agreed growth deals with the Humber local enterprise partnership worth more than £110 million, including support for a regeneration programme for the centre of Cleethorpes. I am sure that one of my ministerial team will be very happy to meet him and his council colleagues.

Rachel Reeves: The floods in Yorkshire, including in Leeds, last Boxing day caused devastation, and many businesses have still not reopened. What conversations is the Chancellor having with insurance companies, which have restricted cover, increased premiums  and put up excesses, thereby not only risking creating ghost towns in many of our communities, but risking jobs, too?

Philip Hammond: That is a matter on which my right hon. Friend the Minister for the Cabinet Office leads, but I have a considerable understanding of the problem, as my own constituency was subject to serious flooding in 2013-14. I will talk to my right hon. Friend and make him aware of the hon. Lady’s concerns.

Anna Soubry: May I thank you, Mr Speaker, for allowing Nottingham to begin to take over Parliament today? My right hon. Friend the Chancellor knows of the great benefits of the queen of the east midlands, because he used to work in Nottingham, and he believes in the huge value of infrastructure projects. Is he minded, as he prepares his autumn statement, to bring forward HS2, making sure that the east midlands hub is in Toton in my constituency, and the electrification of the midlands main line, all of which will help the great city and county of Nottinghamshire?

Philip Hammond: Nottinghamshire is, indeed, a part of the country that I know well and have a great deal  of affection for. The Government are completely seized of the need for infrastructure investment to support the productivity performance of our economy. My right hon. Friend the Transport Secretary will look at the priority to be afforded to different specific projects and will make statements in due course.

Chris Leslie: Given that the east and west midlands together could generate significant growth for our economy if they got the right road, rail and skills infrastructure, and given that today is Nottingham in Parliament day, will the Chancellor acknowledge that the autumn statement should bring forward those ambitions for the midlands engine?

Philip Hammond: The Government are committed to the midlands engine. The hon. Gentleman is absolutely right to say that the midlands conurbation overall has a weight of population and economic activity that allows it to be a rival to the hub of London and the south-east. As I said to my right hon. Friend the Member for Broxtowe (Anna Soubry), announcements about specific projects will be made in due course by the relevant Minister.

Kit Malthouse: One of the most important ways in which the Chancellor could boost economic growth outside—and, indeed, in—London and the south-east is by energising small business. Will he consider reviewing the small enterprise investment scheme, in the hope of simplifying it and of thereby seeing a wall of private cash invested in starting and maintaining small businesses?

Philip Hammond: My hon. Friend is right. Ensuring the supply of funding to start-ups and smaller enterprises as they grow is a key to the future of our economy. I assure him that all schemes, taxes and other such structures will be reviewed in the run-up to the autumn statement, and I will let him know my conclusions on 23 November.

Dennis Skinner: Is the Chancellor of the Exchequer aware that his predecessor introduced a scheme that was based on robbing Derbyshire County Council of £155 million in cuts and promising to give it less than 20% of that money back? No wonder the people in Bolsover marketplace do not call it the northern powerhouse; it is the northern poorhouse.

Philip Hammond: I know that my right hon. Friend the Secretary of State for Communities and Local Government will want to look at the allocation of funding to local authorities, including Derbyshire County Council. As the hon. Member for Bolsover (Mr Skinner) will know, there are many powerful advocates for Derbyshire on both sides of the House.

John Bercow: I wish the hon. Member for Solihull (Julian Knight) a speedy recovery. He may ask his question from his seat.

Julian Knight: Thank you, Mr Speaker. The Chancellor will be well aware that the west midlands has a trade surplus with China, thanks to Jaguar Land Rover in Solihull and wider manufacturing. On their visits to BRIC nations, previous Chancellors have been keen to trumpet business in the northern powerhouse. Will this Chancellor help the cogs of the midlands engine to turn by taking west midlands businesses with him on future visits?

Philip Hammond: Indeed I will. It is an important part of the role of a Chancellor to act as a champion for businesses in the north and the midlands, and to draw the attention of inward investors such as the Chinese and the Indians, who are already heavily invested in the west midlands, to the opportunities that exist in the UK beyond London and the south-east. Such opportunities are not always as obvious to foreign investors as those that exist in London.

Stewart Hosie: In order to boost growth outside London and the south-east, there should be a laser-like focus on manufacturing and its associated innovation research and development, but the UK’s record on R and D spending is lamentable compared with that of our international competitors. May I ask the Chancellor how he intends to remedy that? Will he take the opportunity of the autumn statement to reverse the decision to convert innovation funding from grants to loans?

Philip Hammond: We have supported £22 billion of R and D spending across the UK through the tax credit system. The hon. Gentleman is right; the UK’s productivity performance is weak compared with that of its principal competitors, and our investment in R and D is significantly less than that of many of our principal competitors. I promise him that we are acutely aware of that challenge, and I will address that challenge in the autumn statement on 23 November.

Stewart Hosie: I will take that as a veiled good news story at some point to come. In order to boost growth we need to take exports more seriously, including to the EU, given that our trade balance has gone into reverse over the past two years. To effect that, what efforts is the Chancellor making to rule out a hard Brexit, with visas, tariff barriers and an end to the customs union, all  of which the Treasury says could lead to the loss of  £66 billion of revenue, a reduction in GDP of around 7.5% and a threat, estimated conservatively, to half a million jobs?

Philip Hammond: I know that the SNP does not like a good news story, and I am sure that the hon. Gentleman will have been able, by 23 November, to think up a suitable response just in case there is such a story on that day.
On the wider issue of managing Britain’s exit from the European Union, the Prime Minister has been very clear. We understand the instructions that we have received from the British people, and within our obligation to deliver those we will seek to get the very best deal we can with the European Union that maximises the amount of trade in goods and services between our companies and the markets of the European Union, and between European companies and the UK market.

Jonathan Reynolds: Financial services are one of the sectors most exposed to Brexit, but it is not just jobs in Canary Wharf and the square mile that are at risk; it is jobs throughout the UK, in Manchester, Leeds, Birmingham, Edinburgh and beyond. The messages that the Government have sent so far have been incoherent and counterproductive. Firms need assurance that they will get comparable access to the single market and the ability to retain EU nationals who work for them. Will the Chancellor help finally to put an end to his Government’s chaos today and make a promise to deliver both?

Philip Hammond: The hon. Gentleman is right to identify financial services as one of the areas that is particularly concerned about the way in which the exit from the European Union is managed, because the industry is particularly dependent on the passporting regime that is in place. He is also right to draw attention to the often overlooked fact that 75% of financial services jobs are outside London. This is an important UK-wide industry.
On the specific points that the hon. Gentleman makes, I have certainly sought to reassure financial services businesses that we will put their needs at the heart of our negotiation with the European Union. We understand their need for market access. We also understand their need to be able to engage the right skilled people. I have said on the record—I am happy to say this again today—that I do not believe that the concerns the British people have expressed about migration from the European Union relate to those with high skills and high pay. The problem that people are concerned about relates to those taking entry level jobs. I see no likelihood of our using powers to control migration into the UK to prevent companies from bringing highly skilled, highly paid workers here.

Double Taxation Treaties: Developing Countries

Patrick Grady: What his Department’s objectives are in negotiating double taxation treaties with developing countries.

Virendra Sharma: What outcomes his Department seeks to achieve when negotiating double taxation treaties with developing countries.

Jane Ellison: In negotiating double taxation treaties, the UK’s objective is to reach an agreement that allocates taxing rights on a basis that is acceptable to both countries.

Patrick Grady: Restrictive tax treaties inhibit the ability of developing countries to spend money on public services, such as schools and education. Research from ActionAid shows that, along with Italy, the UK has the highest number of such treaties. Is the Minister willing to work with the Department for International Development to change that?

Jane Ellison: I disagree with the hon. Gentleman. In fact, double taxation treaties help developing countries. They often remove uncertainty about the way in which businesses choose to make investments, and they open up the route to fairer and more open trade. The majority of the UK’s double taxation treaties are based on the OECD model double taxation convention, and we work very closely with countries to reach mutually acceptable treaties.

Virendra Sharma: What plans does the Minister have to carry out assessments of the impact of the UK’s tax treaties on developing countries, and will her Department offer poorer countries the opportunity to renegotiate treaties that do not do enough to support their development?

Jane Ellison: As I have said, there is a rolling programme of renegotiation to make sure that treaties reflect modern standards. More broadly, the UK has a very proud record on capacity building in this area. We lead international efforts to support developing countries in tax capacity building. One example is that DFID funds the Global Forum, the World Bank and the OECD to provide technical assistance to partner countries. We can be proud of that record.

Charlie Elphicke: In negotiating double taxation regimes with developing and advanced nations, will the Minister look at transfer pricing in terms of establishment provisions so that we can broaden the tax base and stop the likes of Apple, Amazon and Google gaming our tax system?

Jane Ellison: The UK is committed to ensuring that UK companies pay a fair share of tax in the countries in which they operate. On all the wider aspects of international tax fairness, I reiterate that the UK has taken a very strong stance across the board on a number of issues. I am always happy to speak to my hon. Friend about this issue because he is very much an expert, and I would welcome his views on all such issues.

Manufacturing Industry

Gordon Henderson: What fiscal steps he is taking to support the manufacturing industry.

David Gauke: The Government have taken steps to maintain a world-class business environment that helps UK manufacturers to thrive. That is why we have cut corporation tax from 28% to 20%— it will fall further, to 17%—and why we have supported £22 billion of research and development  through tax credits for UK companies. This environment helps our manufacturers to grow as innovative, competitive companies.

Gordon Henderson: I welcome the Minister’s response, but what message is he sending to international manufacturing companies with operations in Britain about this country’s future international competitiveness as we leave the European Union?

David Gauke: Our message is straightforward: Britain is open for business. As the Prime Minister has said, we are and will continue to be a confident, outward-looking country.

Seema Malhotra: Manufacturing depends on long-term investment. What assessment has the Minister made of the impact of our potentially leaving the European Investment Bank, and what progress has there been in any discussions about us maintaining our stake?

David Gauke: The UK is in discussions with the EIB.

Steven Baker: Does my right hon. Friend agree that reducing anti-competitive market distortions is both a great fiscal way to promote manufacturing and a way of ensuring our country is best placed for new trade deals?

David Gauke: I agree that removing distortions in the economy results in a more efficient economy. The UK Government have a record of doing that, by, for example, reducing corporation tax.

Margaret Ritchie: Apart from lowering corporation tax what other steps will the Chancellor and his ministerial team take to incentivise manufacturing industry in Northern Ireland?

David Gauke: The freedom for Northern Ireland to set its corporation tax rate is an important measure in itself. We look forward to further progress on that. Of course, there will be an autumn statement next month in which the Government will set out their economic policy. I have mentioned corporation tax and R and D tax credits, which we have made more generous. Those measures will have helped manufacturing businesses in Northern Ireland and elsewhere.

Kevin Hollinrake: I welcome the Government’s ongoing commitment to the northern powerhouse given the impact that that can have on manufacturing, in particular in my constituency, and the allocated funds for the A64 at Hopgrove. Does the Minister agree that such investments must seek maximum economic benefit? The current proposal from Highways England will simply kick an existing pinch point down the road if we do not see the dualling of that carriageway on the A64.

John Bercow: That had an extremely tangential relationship with the matter of manufacturing industry, therefore meriting an extremely pithy response.

David Gauke: I look forward to examining the case for dualling the A64 and the benefit that would provide to manufacturing industry.

Rebecca Long-Bailey: Last month, the Chancellor proudly dismissed his predecessor’s plans to cut corporation tax to 15%. This week, however, we hear of plans hatched by senior Government figures to cut corporation tax as low as 10% as part of a so-called Brexit nuclear option, despite the fact that both the British Chambers of Commerce and the Institute of Directors have stated that cutting corporation tax would not be at the top of their wishlist. Will the Minister put an end to his Government’s reign of chaos and confirm his long-term position on corporation tax, so that businesses have the stability they deserve?

David Gauke: I am not sure whether I would use the phrase “reign of chaos” if I was a Labour Front Bencher. Let me be very clear. The UK Government have rightly reduced corporation tax from 28% to 20%. We have legislated for it to go down to 17%. If there are any further announcements they will be at a fiscal event, whether an autumn statement or a Budget.

Rebecca Long-Bailey: I am afraid that the Government chaos we have seen on corporation tax is sadly replicated on investment. The Chancellor promised to tear up his predecessor’s Budget and develop an industrial strategy, before denying he was planning a spending splurge. A recent Ipsos MORI poll showed that almost two thirds of Britons agree that the country is not doing enough to meet its infrastructure needs, and the Opposition agree. Will the Minister end his Government’s chaotic record on investment and confirm how much he plans to invest in infrastructure, on what, and where he will get the money from?

David Gauke: On the subject of corporation tax, I point out that it was not that many months ago that on one day the shadow Chancellor condemned the reduction to 17% while in Committee the Labour party voted for it. I will be clear that it is no good coming forward with incredible plans to spend £500 billion on infrastructure without any idea of how those plans will be paid for. The Chancellor will make a statement on 23 November on our policy on this issue. The Labour party really needs to change track if it is to have some credibility.

Priority School Building Programme

Craig Whittaker: What recent discussions he has had with the Secretary of State for Education on when the next phase of funding will be available for the priority school building programme.

David Gauke: The £4.4 billion priority school building programme was established to rebuild or refurbish those school buildings in the very worst condition across the country. The programme’s second phase was announced in May 2014 and feasibility studies are now being carried out. In addition, we are allocating £4.2 billion across 2015 to 2018 to schools, local authorities, academy trusts and voluntary aided partnerships to maintain and improve their schools.

Craig Whittaker: I thank my right hon. Friend for his reply. For many years now, Todmorden High School in Calder Valley has been the top priority for a rebuild. It is currently taking a good chunk of maintenance money from other schools just to stay open. Will my right hon. Friend look at this carefully, so that we can finally give the pupils of Todmorden high school the school they deserve?

David Gauke: I understand my hon. Friend’s disappointment, and that of his constituents, that Todmorden was not successful in its application to the priority school building programme. We need to prioritise schools with blocks in the very worst condition. I understand that Todmorden’s buildings are now receiving some investment through the local authority, which will have competing priorities for capital resources, but I am sure my hon. Friend will continue to make the case for the school.

John Pugh: Given the £180 million overrun on phase one, will the Government be tempted to backfill with second-rate private finance initiative buildings? What role will PFI have in the programme?

David Gauke: Let me address our record. We have spent £18 billion since 2010 on the school estate and we are committed to a further £23 billion so that pupils can be taught in facilities that are fit for the 21st century. We of course want to ensure that that is funded in the most appropriate, value for money and sustainable way.

Regional Infrastructure Development

Rehman Chishti: What steps he is taking to support regional infrastructure development.

David Amess: What steps he is taking to support regional infrastructure development.

Karl McCartney: What steps he is taking to support regional infrastructure development.

Kelly Tolhurst: What steps he is taking to support regional infrastructure development.

Philip Hammond: World-class infrastructure is central to raising our country’s productivity. About 3,000 infrastructure projects have been delivered across the UK since 2010, with another 600 projects worth over £480 billion in the pipeline. We are investing over £13 billion in transport across the north, with £5 billion in the midlands. Nationwide, we are making the largest investment in roads across the UK in a generation, and rail is experiencing a level of investment not seen since Victorian times.

Rehman Chishti: I thank the Chancellor for that answer. Will he ensure that the Lower Thames Crossing option C, preferred by the Highways Agency, is quickly taken forward? That will enhance the investment in Medway and the whole of the Thames Gateway area, facilitating house building, encouraging business growth and supporting existing infrastructure in the Kent area.

Philip Hammond: I commend my hon. Friend for the way he has campaigned on this issue. We recognise the importance of this crossing to supporting the economy on both sides of the Thames, particularly given the constrained capacity at Dartford. It will produce significant benefits locally, regionally and nationally. The Government will be making a decision on the location and route in due course.

David Amess: Conservative-controlled Southend-on-Sea Borough Council was very disappointed that it was unsuccessful in its bid to the coastal communities fund. Will my right hon. Friend agree to meet me, the leader of the council John Lamb and others, so we nay share with him why we need investment in infrastructure, particularly as Southend is the alternative city of culture next year?

Philip Hammond: My hon. Friend makes a good point. The Government recognise the ongoing growth potential of Southend. The Government’s substantial investment to date in Southend includes over £40 million through the South East local enterprise partnership growth deal and the 2014 city deal. The Government announced last year that the coastal communities fund would be extended over this Parliament. At least another £90 million of further funding is available to promote sustainable economic growth and jobs in the UK’s coastal communities. I strongly encourage Southend-on-Sea Borough Council to apply to this fund.

Karl McCartney: Given my right hon. Friend’s welcome commitments on regional infrastructure and my plethora of conversations with his Cabinet colleagues, Ministers and the leader of Lincolnshire County Council over the past few days and years, will he now commit to working with us all to secure the funding for the dualling of the eastern bypass around my constituency of Lincoln, which will greatly support not only the further development of the city but the whole of Greater Lincolnshire?

Philip Hammond: I recognise my hon. Friend’s commitment to his preferred version of this project. Funding has been made available for the provision of the Lincoln eastern bypass, in the county council’s preferred version a single carriageway road. As my hon. Friend will know, the county council is not in favour of restarting the process from scratch and introducing further delays, so I am afraid I cannot give him any confidence that additional funding will be made available to adopt a dualling solution.

Kelly Tolhurst: I was pleased that in the last Budget statement, the previous Chancellor, my right hon. Friend the Member for Tatton (Mr Osborne), announced a new Thames Estuary 2050 Growth Commission to focus on delivering essential infrastructure development for this crucial region. Will my right hon. Friend assure me that this commission, which is led by Lord Heseltine, will continue to be supported?

Philip Hammond: Yes. I am glad that my hon. Friend has raised this point. The Thames Estuary 2050 Growth Commission has been asked to develop an ambitious plan for north Kent, south Essex and east London. I am grateful to Lord Heseltine and his fellow commissioners  for leading this important work, and I look forward to receiving the interim report ahead of next year’s Budget, when I will respond to it.

Helen Goodman: When the Chancellor came to the Treasury Select Committee last week, he was unsure whether analysis of the effects of leaving the European Union was being done by region. He has had a week to find out, so will he now give us an answer?

Philip Hammond: If the hon. Lady checks the video, she will find that I was not unsure. I was advising my civil service colleague that I understood that we were doing such regional analysis. We are carrying out regional analysis, which will help to inform the Prime Minister’s negotiating strategy.

Caroline Flint: Does the Chancellor agree that energy efficiency should be a priority for infrastructure development, both nationally and regionally? To that end, will he seriously consider earmarking the proceeds of the shale gas sovereign wealth fund for energy efficiency measures so that we can not only save on bills, but create jobs and encourage innovation?

Philip Hammond: I am not necessarily in favour of earmarking or hypothecation of funds for that specific purpose, but the right hon. Lady makes an important point. We have a serious challenge on this country’s energy capacity over the next 20 years, and we are going to have to invest eye-wateringly large sums of money—perhaps £100 billion—just to ensure that the lights stay on. Of course it makes sense to look at ways of reducing demand for energy through energy conservation measures alongside the demands for new energy generation plants.

Sammy Wilson: Last week, the Infrastructure Minister in the Northern Ireland Executive announced that a major infrastructure project in Belfast would be stopped because it was unlikely to be completed before we leave the EU so the funding would be lost. Has the Infrastructure Minister had any discussions with the Chancellor about this project, and will the right hon. Gentleman assure the Northern Ireland Executive that any funding gap for any project started before we leave the EU will be bridged by the Treasury?

Philip Hammond: I am not aware of the project to which the hon. Gentleman refers. As far as I am aware, the Northern Ireland Executive has not been in touch with the Treasury about it. We have, in fact, made two announcements. I announced that all projects signed in the normal course of business before the autumn statement would be guaranteed, irrespective of whether they continued to be funded by the EU after our exit. I subsequently made a further statement saying that after the autumn statement any new EU-funded projects would, provided they passed a UK value-for-money and strategic priorities test, get the same guarantee: however long they last, they will be funded by the UK Treasury once EU funding stops.

Peter Dowd: This Government continue to be in chaos over their flagship so-called northern powerhouse. I live there, and I see it every day: they  have no long-term industrial strategy. Meanwhile,  notwithstanding what the Chancellor said earlier, regional economies are suffering from a lack of sustained investment in their infrastructure, and particularly transport infrastructure, by comparison with our major European partners—a problem now compounded by Brexit. What plans does the Chancellor have to end this uncertainty and finally bring about a rebalancing or an enhancement of regional transport infrastructure expenditure?

Philip Hammond: I urge the hon. Gentleman not to talk down the north and the significance of the northern powerhouse. The northern powerhouse is an important part of the Government’s strategy, and the new Prime Minister has made clear her commitment to it. The hon. Gentleman is, however, right to draw attention to the shortfall of infrastructure investment in the United Kingdom overall, by comparison with our principal competitors. That is an issue that we must address at national level. We must look for the best value for money—the projects that will make the greatest contribution to closing the productivity gap across the UK—and that is what we will do.

EU Budget: UK Contribution 2017-18

Laurence Robertson: What the UK contribution to the EU budget is expected to be in 2017-18.

David Gauke: The Office for Budget Responsibility is responsible for forecasting contributions to the European Union. It will update its forecast in this year’s autumn statement, but the forecast for the UK’s gross contribution in 2017-18 was £12.6 billion at the time of the Budget.

Laurence Robertson: Notwithstanding all the spending pledges that have been made today and recently, hospitals, schools, police and roads in my constituency certainly need a spending boost. Does the Minister agree that the sooner we leave the European Union, the sooner that money will be available to them?

David Gauke: The amount of any money saved will depend on the overall fiscal situation and the broader economic environment. Decisions on spending will be made in the round in autumn statements and Budgets, but while we remain members of the European Union, we must of course comply with the requirements to pay into it.

Emma Reynolds: May I press the Chief Secretary on this point? On the day of the referendum, I met an NHS worker who had voted to leave the European Union precisely because she thought that more money would be available for the NHS, thanks to the “£350 million a week” that was emblazoned on the Vote Leave bus. When we leave the European Union, will we get that money?

David Gauke: It is certainly not for me to justify or explain the pledges that were made by the leave campaign, but I will say that public spending decisions must be made in the context of the economic and fiscal situation.

Mark Field: I appreciate that getting back some of our EU contribution was a factor in the decision to leave the European Union, but will my right hon. Friend confirm that the   Government are, at least at this stage, open to the idea of making some contribution in the future if we are to secure some sort of access to the single market for financial services, or, indeed, making some contribution in relation to passporting and equivalence?

David Gauke: What is important is for the United Kingdom to secure the best possible deal in our negotiations with the European Union. I do not think that it makes sense to bind our hands and close down options at this point; nor do I think it right for us to provide a running commentary on the matter.

Geraint Davies: Wales will continue to receive convergence funding while we are in the EU, but will the Treasury nevertheless honour the Prime Minister’s pledge to electrify the Great Western Railway line all the way to Swansea in order to make it part of the pan-European network and stimulate manufacturing and exports?

David Gauke: That is a matter for my right hon. Friend the Secretary of State for Transport, but, as my right hon. Friend the Chancellor of the Exchequer has made clear, the Government are committed to improving our infrastructure.

Economic Growth: Midlands

Edward Argar: What steps he is taking to support economic growth in the midlands.

Simon Kirby: The Government are committed to helping the midlands to unleash its economic potential and make it a powerful engine for growth. We are backing skills and innovation. We are supporting the automotive and aerospace industries. We have made investments, and we are putting power in the hands of local people by devolving budgets from Whitehall to a new mayor for the midlands. I hope that it is in order, Mr Speaker, for me to mention our excellent candidate, Andy Street.

Edward Argar: Earlier this year, a Grant Thornton report suggested that the east midlands could contribute £53 billion to the UK economy by 2025, reflecting the central role that Leicestershire and the east midlands continue to play in driving the country’s growth. Does my hon. Friend agree, however, that if we are to sustain that record of success, it is vital for us to continue to deliver on investment in Leicestershire’s road, rail and broader infrastructure?

John Bercow: Order. May I remind colleagues of the merits of the blue pencil?

Simon Kirby: Good advice, Mr Speaker, as ever.
I thank my hon. Friend for his interest in the east midlands. I agree that improving transport between and within our major cities is vital to help them fulfil their productive potential. As the Chancellor has said, we are investing over £5 billion in transport infrastructure to put the midlands at the heart of a modern transport network.

John Bercow: Pithiness personified.

Philip Hollobone: May I press the case for the continued electrification of the midland main line and that there be no further delays to this excellent project?

Simon Kirby: Yes, he can.

Tax Credits (Concentrix)

Christina Rees: What steps his Department is taking to compensate people affected by incorrect withdrawal of tax credits as a result of errors by Concentrix.

Jane Ellison: If anyone feels their tax credits have been incorrectly withdrawn owing to errors by Concentrix, they should urgently contact Her Majesty’s Revenue and Customs, which will review all complaint cases and will, and indeed does, pay redress where appropriate.

Christina Rees: Labour welcomes the cancellation of the Concentrix contract and the fact that it will be administered in-house by HMRC staff. Will the Minister reassure the thousands of single parents and families, many in my Neath constituency, that their tax credits erroneously stopped by Concentrix will be reinstated immediately so their children can be kept safe and warm and not go unfed as winter approaches?

Jane Ellison: The hon. Lady is absolutely right to draw the House’s attention to the importance of prioritising vulnerable claimants. HMRC held a further drop-in for colleagues recently, on 19 October; it was attended by 15 Members, and a number of complaints and issues were raised, which we are on the way to resolving.
On restarting claims, the key is to get the right information. HMRC has taken back a vast number of cases, and I will say more about this tomorrow. The priority is to get the right information, to get claims started again as soon as the facts are established.

Helen Jones: When the Minister wrote to me after I asked a previous question, she said:
“Amounts to be paid to the supplier are reduced if actual performance fails to meet standards set in the contract.”
Does that include penalties for withdrawing tax credits when they should not have been withdrawn?

Jane Ellison: The terms of the contract between HMRC and Concentrix are obviously in the public domain, and it is right that when performance is not as per the contract there are associated deductions, but I will be in a position to give the House more information about the contract in tomorrow’s Opposition day debate.

Hannah Bardell: A number of my constituents have been affected by this, not least a frontline police officer who had her benefits withdrawn, which meant her childcare could not be paid and she was potentially not going to be able to go to work. Luckily, my office intervened and we were able to get her benefits, but what is the Minister going to do to compensate people for upset and unjust treatment?

Jane Ellison: There are two points here. First, as I have said, if people feel their tax credits have been incorrectly withdrawn because of errors they should contact HMRC, which will review that and redress can be made. Secondly, customers can ask for mandatory reconsideration if they do not feel that their circumstances have been correctly identified. Sometimes that is because people do not send through the right information.

Single Market

Shabana Mahmood: What assessment his Department has made of the potential effect on the economy of the UK no longer having access to the single market.

Philip Hammond: The UK will leave the European Union and will introduce control of migration between Britain and the EU. Working with officials across Government, the Treasury continues to undertake a range of analyses to inform the UK’s position for the upcoming negotiations and we have made it clear, I am afraid, that we are not going to provide a running commentary, but we do want the best outcome for the UK and that means pursuing a bespoke arrangement that will allow our companies maximum access to the European market.

Shabana Mahmood: The Chancellor’s predecessor had many a failed target and plan, one of which was a target of £1 trillion in exports by 2020, a target that is nowhere near being reached even with full access to, and membership of, the single market. Meanwhile other countries such as Germany currently export more than we do to China and other growth markets. Does the Chancellor agree that the failure of the Government to improve the UK’s export performance has left us unable to take full advantage of opportunities outside the EU and more vulnerable to—

John Bercow: Order. I think the hon. Lady should leave a full version of her question in the Library of the House.

Philip Hammond: The Government can of course support and enable exporters, but we cannot do their job for them. It is for British exporters to make their businesses competitive and to go and sell their wares around the world, but we will do everything we can to support them in that endeavour.

David Nuttall: Does my right hon. Friend agree that unless, bizarrely, the European Union were to impose trade sanctions on the UK, there would be absolutely nothing to prevent us from having access to the single market when we leave the EU?

Philip Hammond: My hon. Friend is right in the  sense that every nation that is a member of the World Trade Organisation, as we are, has the right to  access other members’ markets on WTO terms. However, WTO terms would be quite challenging for some of our industries. For example, in the automotive industry, WTO terms imply a 10% tariff on cars entering  other markets.

Barry Sheerman: The Chancellor will know that West Yorkshire is the beating heart of the manufacturing economy in this country, but my manufacturing leaders, and the EEF, feel left out of the loop in relation to their future after Brexit. Can he reassure them, because they are very disturbed about the future?

Philip Hammond: I can certainly reassure the hon. Gentleman that manufacturing industry is very much in the forefront of our thinking as we approach these negotiations. I am sorry that I have not had a chance to go to West Yorkshire, but I have been engaging with businesses in all sectors of the economy, including many businesses from the north that have attended round-tables in Downing Street over the past few weeks to set out their concerns so that we can take them properly into account.

Julian Brazier: In welcoming my right hon. Friend’s robust stance on this matter, may I suggest that as there is a large balance of payments deficit with Europe, specifically in the automotive sector, it would be in the EU’s interest to strike a decent deal with us, as he intends to do?

Philip Hammond: Our intention is to get the very best deal we can with our neighbours in the European Union to allow access for our companies to trade their goods and services into the EU. However, I would just caution my hon. Friend: to look at the economic arguments alone is to miss an important point. There is a political debate going on here in Europe, and European politicians are very conscious of the impact of Britain’s departure on their political project. I do not think we can be certain that economics alone will dictate the course of this negotiation.

Leaving the EU: Regional Funding

Luciana Berger: What assessment he has made of the potential effect of the UK leaving the EU on (a) the northern powerhouse and (b) regional funding.

Philip Hammond: The Government have provided a guarantee for all European structural and investment fund projects signed before the autumn statement. We have also provided a guarantee for all ESIF projects signed after the autumn statement and before the UK’s departure from the European Union, provided that they pass the value-for-money test and are in line with domestic strategic priorities.

Luciana Berger: I have listened closely to the Chancellor’s previous answers about regional distribution of investment. The latest figures show that only a quarter of national infrastructure projects are in either the north-west or the north-east of England, with just one of the top-funded 25 projects in that area. With further damaging cuts to public sector net investment due in the remainder of this Parliament, when will the Government address this inequality, match their rhetoric with action and start properly funding the northern powerhouse?

Philip Hammond: I make three points to the hon. Lady. First, we will have an autumn statement in just over four weeks’ time, and I will be able to set out more of our forward plans at that time. Secondly, I am not sure off the top of my head what the population proportion of the UK is in the north-west and north-east regions, but if the figures that she has quoted are correct, I am not so sure that a quarter of infrastructure investment represents disproportionate underfunding. I would need to check that. Thirdly, the very large investment in Crossrail, a strategically important national project, has had the effect of skewing infrastructure investment towards London over the past few years.

Smart Energy System

James Heappey: What assessment he has made of the potential effect of a smart energy system on levels of productivity.

Simon Kirby: I thank my hon. Friend for his interest in both these important topics. The National Infrastructure Commission has estimated the benefits of a smart energy system to be between £3 billion and £8 billion a year by 2030.

James Heappey: I am grateful to the Minister for his response and am pleased that he agrees with the advantages of a smart energy system. Ahead of the autumn statement, will the Minister look at the role that the Treasury might play in digitising our energy system by accelerating the deployment of storage technologies, demand-side response and the upgrade of our distribution networks so that we can achieve the productivity gains he expects?

Simon Kirby: The Treasury will continue to work with the Department for Business, Energy and Industrial Strategy to drive forward a smart energy system. The Government have committed to implementing the National Infrastructure Commission’s recommendations in full.

Topical Questions

Steve Double: If he will make a statement on his departmental responsibilities.

Philip Hammond: My principal responsibility is to ensure the stability and prosperity of the economy. In the current circumstances, that requires a combination of near-term measures to respond to the shock that the economy has received and longer-term measures to manage the structural adjustment as the UK transitions out of the EU and to address the UK’s long-term productivity challenge.

Steve Double: Today is my 30th wedding anniversary, so will the Chancellor join me in wishing the long-suffering Mrs Double a happy anniversary? Does he agree that the marriage tax allowance is a demonstration of this Government’s support for marriage? However, take-up has been low, so ahead of the autumn statement is the Chancellor considering increasing the allowance? If he is not, may I encourage him to do so?

Philip Hammond: I certainly join in wishing my hon. Friend and his wife a very happy 30th anniversary. Taking my queue from last week, I probably will not suggest how Mrs Double might commemorate the event.
My hon. Friend is quite right to highlight the value of marriage in society. I hope that I can reassure him that the Government remain firmly committed to supporting this important institution through the marriage allowance. Eligible couples could benefit by up to £432 this year, and we have just passed the landmark of 1 million families who have made successful applications. I agree with my hon. Friend that take-up of the marriage allowance is not high enough, but HMRC will launch a new campaign early next month to increase awareness and take-up.

John Martin McDonnell: Bringing the Chancellor back to Brexit and the role of his Department—happy anniversary, by the way, to the hon. Member for St Austell and Newquay (Steve Double)—before the referendum, as the hon. Member for Dundee East (Stewart Hosie) said, the Treasury published a paper warning that the impact on Government receipts of leaving the single market would be a loss of up to £66 billion. Last week, Tom Scholar, the permanent secretary to the Treasury, told the Treasury Committee that the figures were “not directly applicable”. The Chancellor then questioned his own Department’s calculations by referring to mitigating factors that were not taken into account. There is fumbling chaos about Brexit not just in the Cabinet, but in the Treasury as well. Will the Chancellor clarify his Department’s exact calculation of the outlook for public finances if access to the single market is not achieved?

Philip Hammond: The right hon. Gentleman can characterise it however he likes, but the simple fact is that all economic modelling must make assumptions. The model that the Treasury produced in April assumed no policy response by Government—we know that there has been a monetary response in the form of the monetary expansion delivered by the Bank of England on 2 August—and that an article 50 notice would be served immediately after the referendum, which we know was not the case.
As for the ongoing work, the right hon. Gentleman will have to wait until 23 November when the Office for Budget Responsibility will publish its forecast.

John Martin McDonnell: No figure is attached to anything that the Chancellor has said, which again confirms the chaos in Cabinet and in his Department. Can I ask the Chancellor to pass on my thanks to the officials who helpfully published on the Treasury’s website a document labelled
“Public Sector Finances Briefing – Official: Sensitive for internal use only”?
The document at least gives us some reliable information in that it confirms that the Government are failing to meet predictions on tax receipts and deficit reduction. It also reveals that that data are based on
“activity from before the referendum so any post referendum downturn will exacerbate this.”
Does that not prove once and for all that far from fixing the roof while the sun shone, this country was scandalously economically ill-prepared and politically totally unprepared for the Brexit decision?

Philip Hammond: Just so that the right hon. Gentleman is absolutely clear, it is quite wrong to suggest that my Department does not have any figures—it does, but I am just not giving them to him.
As for the document that the right hon. Gentleman spent such a lot of time yesterday rather unsuccessfully trying to tout around the media, it was published by mistake, but all the figures in the document have already been published elsewhere. All of them are in the public domain.

Suella Fernandes: Kevin Lancaster and Simon Davis started their business, Aqua Cooling, from scratch in Fareham in 2000, and it now generates £1.7 million in profit and is a leading industrial cooling firm. Last week, the Institute of Physics awarded Aqua Cooling its business innovation award for its innovate application of physics to generate jobs and profit. Will the Chancellor join me in congratulating Aqua Cooling and outline what the Government are doing to support research and development, so that other self-starters like Kevin and Simon can grow their businesses?

Jane Ellison: I think that all Treasury Ministers would be delighted to congratulate Aqua Cooling on the innovation award it has won. As has been said, the Government have committed to supporting research and development in British businesses, providing one of the most generous R and D tax credit schemes in the world to UK small business. I am delighted to say that it was claimed by more than 18,000 small and medium-sized enterprises in 2014-15.

Tom Blenkinsop: Why does the Chancellor believe that corporation tax receipts collapsed in September 2016 to their lowest level since 2009? Why does he believe borrowing will overshoot the Office for Budget Responsibility’s forecast by an extra £17 billion this financial year?

Philip Hammond: I am sorry to be boring, but all these issues will be addressed at the time of the autumn statement, when we will have the latest fiscal projections from the OBR.

Stuart Andrew: I know that there will be a statement on this in a moment, but it has been reported that Heathrow is the chosen option for expansion. It is important that every part of the UK benefits from this and so do our regional airports. Will the Chancellor agree to meet me to discuss how we can improve connectivity to Leeds Bradford airport and how we might get funding for a rail link to it?

Philip Hammond: As my hon. Friend and the House will know, an announcement has been made that the airports committee this morning decided to move ahead with the north-west runway at Heathrow, and my right hon. Friend the Transport Secretary will be making a statement to the House very shortly. My hon. Friend is absolutely right to say that regional connectivity is vital. Regional slots at Heathrow have been squeezed out by the pressure on the runways there, and we will ensure, as a part of this package, that regional slots are protected in the future.

Stephen Timms: Tens of thousands of UK jobs depend on euro-denominated clearing in the UK. Will the Chancellor tell us how important he regards its still being permissible in the UK after we leave the European Union?

Philip Hammond: The right hon. Gentleman has put his finger on an important issue. As he will know, the European Central Bank has already had one go at trying to prevent euro-denominated clearing from taking place in the UK, and it is no doubt a very iconic issue for many of our European partners. It is an important part of the overall financial structure in London and it is not easily separated from the other activities that operate in London, but in terms of the jobs and value attached to it, it is a relatively small part of the total.

Desmond Swayne: What is the Chancellor planning to do with Bradford & Bingley’s assets?

Philip Hammond: Following the announcement at Budget 2016, UK Asset Resolution Limited has launched a programme of sales of the Bradford & Bingley mortgage assets that it holds. That will be designed to raise sufficient proceeds to repay the £15.65 billion debt to the Financial Services Compensation Scheme and, in turn, the corresponding loan from the Treasury. It is expected, subject to market conditions and ensuring value for money, that this programme of sales will have been concluded in full by the end of 2017-18.

Stewart McDonald: The Government gave £5 million in funding for the refurbishment of the Burrell collection in my constituency, with the money coming from cash collected from the LIBOR scandal. Will the Chancellor consider a similar funding scheme for Holmwood house in my constituency, given that it is the bicentenary of the architect’s birth next year and it needs some TLC?

Philip Hammond: I am glad that at this stage of the process before the autumn statement, I am able to say that all submissions will be carefully considered, and if the hon. Gentleman would care to let me have something in writing, I will happily look at it.

Nigel Huddleston: .

Jane Ellison: The Government are reviewing the potential options to support regional airports, following the discussion paper that was published last year, and of course we will set out full details of our response in due course. We received 53 responses to the consultation. They were good, constructive, valuable responses and we are looking carefully at them.

Derek Twigg: What is the Chancellor’s assessment of the effect of inflationary pressures on the prices of goods and food over the next 12 months?

Philip Hammond: Clearly, the decline in the value of sterling will have an inflationary impact. How quickly that passes through into the UK economy is a subject of modelling by all economists who carry out these types of analyses. The Bank of England will very shortly be publishing its next inflation report, and that should give an indication of the forward trajectory.

Philip Hollobone: Under what circumstances would my right hon. Friend the Chancellor authorise another round of quantitative easing if requested by the Governor of the Bank of England?

Philip Hammond: I am grateful to my hon. Friend, as he has asked me a very important question. He knows that the operation of monetary policy in the UK is independent of Government. Monetary policy, including measures such as quantitative easing, has been highly effective in supporting the economy. Because of the fiscal implications of an indemnity for the Bank, packages have to be formally agreed by the Chancellor. Although I cannot prejudge any hypothetical request, no request for quantitative easing has ever been refused, and I see no reason why circumstances would be different in future.

Phil Boswell: The latest reports on the dash for cash in RBS’s Global Restructuring Group show even more misconduct by this bank. Given that we own a majority of RBS shares, does the Chancellor not believe that the UK Government have an obligation to the people of this country to conduct a robust investigation into the allegations of misconduct?

Simon Kirby: The Financial Conduct Authority is looking at this important issue, and we will wait on its view.

John Bercow: Michael Fabricant—not here. That is unprecedented in the history of my being in the Chair. I have never known the hon. Gentleman not to be here, but, fortunately, Mr Philip Davies is here.

Philip Davies: How much UK taxpayers’ money used to bail out and to loan to other EU countries by the EU has been repaid to the UK, and how much is still outstanding? What is the Chancellor doing to ensure that we get all that money back when we leave the European Union?

David Gauke: No UK taxpayers’ money has been used in the EU’s lending to other member states. Only in the event of default would the UK be asked to pay its share.

Chi Onwurah: What impact has the Secretary of State made of his predecessor’s austerity economics on the nation’s prosperity and would he like to apologise for that divisive and discredited ideology?

Philip Hammond: I assume that the hon. Lady means what assessment I have made. Since 2010, we have brought this country back from the very brink. We have borrowing down from more than 10% of GDP to around 4% with more to deliver. We have created 2.7 million new jobs, making this economy the fastest growing in the G7 for the past three years, and the fastest job creator in the developed world. That is a record of which we can be proud.

Cheryl Gillan: To what level must the astronomical costs of HS2 rise before the Chancellor advises his colleagues that the project is no longer good value for money for the taxpayer?

David Gauke: We believe that HS2 is part of modernising our transport system and ensuring that we have infrastructure fit for the 21st century.

George Kerevan: In light of the upcoming report of the RBS’s Global Restructuring Group and given that past systems of redress for small businesses have been ad hoc and have failed, will the Chancellor meet the all-party group for fair business banking to see whether we can involve a permanent and effective system of redress?

Simon Kirby: The hon. Gentleman makes a fair point, but we should wait until we receive the FCA report before we proceed.

Robert Jenrick: Mr Speaker, you will have seen the latest Office for National Statistics survey that found that Newark is the happiest place in mainland Britain. However, what is testing the people of Newark is the appalling state of their local roads. Will the Chancellor do another favour for Newark, and in his autumn statement bring forward the new Newark northern bypass?

Philip Hammond: As a former resident of my hon. Friend’s constituency, I am delighted to acknowledge that it is the happiest place in Britain. Certainly some of my happiest times and memories are of living there. As I said earlier, we are currently in the process of receiving submissions from hon. Members across the House, and I would be very happy to receive a written submission from my hon. Friend.

Kate Green: As the Chancellor is considering investment in roads in his autumn statement, will he look sympathetically at the need for investment to support the substantial Carrington development in my constituency, both in the M60-M62 network and in the relief road that will be necessary to support journeys in and out of the Carrington area?

Philip Hammond: I do not know the project that the hon. Lady talks about. I assume that it is a housing development, and we are certainly interested in the way in which infrastructure investment can not only deliver in its own right, but enable much-needed housing development. If she would like to let me have a written submission, I would be happy to look at it.

Several hon. Members: rose—

John Bercow: I am afraid that this will be the last topical question.

Alex Chalk: Does the Chancellor support Cheltenham’s Cyber Innovation Centre, and does he agree that spending on our world-class defence and security assets, such as GCHQ, can play a vital role in nurturing the high-tech civilian jobs of tomorrow?

Philip Hammond: Yes. I was privileged as Foreign Secretary for two years to have oversight of GCHQ, which is truly a world-class facility, and using that facility not only  to ensure Britain’s security but to create a cutting-edge business sector is an entirely sensible thing to do. I welcome the success of the Cheltenham Cyber Innovation Centre.

PRIVATE MEMBERS’ BILLS

Charles Walker: (Urgent Question): To ask the Leader of the House of Commons if he will make a statement on the Government’s response to the Procedure Committee’s second report of this Session on Private Members’ Bills and if he will provide time for that report to be debated.

David Lidington: The Procedure Committee published its report last Tuesday, 18 October. In my evidence to the Committee last Wednesday, 19 October, I said that the Government were considering the report and intended to respond in detail within the normal two-month timeframe. I am happy to confirm that commitment to the House today.

Charles Walker: I thank the Leader of the House for his answer. Too often on Fridays, when we have private Members’ Bills, this House bleeds. It bleeds credibility and it bleeds standing. The Government are well aware of that fact. The Procedure Committee has been trying for the past three years to bring its concerns to the attention of the House and to gain Government support for some of our modest recommendations to restore some credibility and some faith in the process.
Our recommendations—the Committee’s recommendations —would not necessarily mean that what happened this past Friday would not happen again, but they would demonstrate to the public that we in this place, Back Benchers, take legislation seriously and we take Back-Bench legislation seriously. The truth is that, without the will on behalf of the Government to change Fridays, we will still have too many days when we leave this place downcast and somewhat ashamed at the proceedings that have gone on before us.
We have a listening and concerned Leader of the House. I hope that he will receive our recommendations in a positive way and accept some small part of them, particularly that part that would allow the Backbench Business Committee to assign up to the first four private Members’ Bill slots to Members. That would encourage serious legislators in this place to invest time and energy, working with one another for a year or more, to come up with a legislative proposition that, if it did not command the support of the House, would at least demand the attention of the House when it was brought before it.

David Lidington: My hon. Friend has provided a succinct summary of some of the key recommendations of his Committee’s report. He has campaigned strongly and honourably for procedural changes to try to enhance the status of Friday debates on private Members’ Bills. I gave him an undertaking in an evidence session with his Committee last week that the Government would look seriously at his Committee’s most recent report. Clearly, we will need both to consider his recommendations and to have collective discussion in the Government before publishing our response, but that we will do.

Valerie Vaz: I thank the hon. Member for Broxbourne (Mr Walker) for his urgent question. I well remember as a new Member coming in here on a Friday when there was a debate on a private  Member’s Bill on daylight saving and Members took so long to talk it out that it was dark by the time we left the Chamber.
One of the recommendations is that the Backbench Business Committee should decide which Bills are worthy of going forward. May I ask the Leader of the House whether the Committee will be expanded on a cross-party basis? It currently has two members from the Opposition, five from the Government party and one from the Scottish National party. The smaller parties are not represented at all.
Does it not appear that the Government would be in control of which Bills are picked? Therefore, will the Committee’s terms of reference and the objectives have to change? Will the Leader of the House have to provide extra time for these Bills, or will they eat into other House business that is currently protected such as Opposition days and Backbench Business debates? When the Bills are picked by the Committee, will they become part of days devoted to Backbench Business debates? If the Government say that they support a Bill, rather than talk it out as the Under-Secretary of State for Justice, the hon. Member for East Surrey (Mr Gyimah), did last Friday, can they not set up a Bill Committee to go through the clauses and amend the measure, just as we do for other legislation? Alternatively, they can come clean and say that they do not support the Bill.
Will the Leader of the House have to look at changing the right of a Member to present a Bill under a ten-minute rule motion and at the procedure for doing so? Finally, he kindly said that he will report back to the House within two months—is that before or after Christmas?

David Lidington: Our intention is to publish the Government’s response within the two-month timeframe that has been long established under the conventions of the House. We will respond in detail to the proposals from the Procedure Committee. I am always willing to look with an open mind at proposals, whether from the hon. Lady or from other hon. Members, for changes to our procedures that command significant and, ideally, cross-party support. I do not intend this to be in any way a rejection of what she said, but sometimes proposals are made that, when examined more closely, turn out to have the support of a minority of Members, who feel strongly, but which do not command widespread support.
To respond to another point that the hon. Lady made, it remains the case, as it always has, that if a promoter of a private Member’s Bill has sufficient support among colleagues in all parts of the House to deal with closure motions or insist on a Second Reading, they can do so. Their ability to do so would reflect a genuine surge of support for their Bill from the House as a whole.

Alan Haselhurst: As someone who has probably had the privilege of listening to more Friday debates than any other serving Member, I support the vehemence of my hon. Friend the Member for Broxbourne (Mr Walker), if not all the recommendations of the Procedure Committee. I hope that the Leader of the House is prepared to allow a fuller debate in which different ideas can be put forward, because we have really got to change the present arrangements.

David Lidington: I am happy to discuss further with my right hon. Friend his particular experience as a former Chairman of Ways and Means. I will consider the  request for time to be made available, although I would gently say that time is available in the House for debates that is not within the gift of the Government but within the gift of Back Benchers.

Pete Wishart: I do not think that we have ever witnessed such a depressing and dispiriting spectacle as the one we saw on Friday. A Government Minister got to his feet to talk out a private Member’s Bill. It was not political knockabout or a party political issue: it was a private Member’s Bill designed sensitively to try to ensure that generations of gay men were pardoned for crimes that no longer exist.
The public could not hold the way in which we conduct business in the House in more contempt. On Friday, they were proved right, and every single fear about the way in which we conduct business was justified. I totally support the hon. Member for Broxbourne (Mr Walker) in his attempt to ensure that we do something about the appalling way in which we deal with private Members’ Bills. It is the one opportunity that we have as Back Benchers to engage in the legislative process and to ensure that we get things on the statute book. We cannot continue to do things as we did on Friday, so I appeal to the Leader of the House to look at the report, treat it seriously and introduce solid plans so that we never, ever get the disgrace of Friday on the Floor of the House again.

David Lidington: I repeat the undertaking that I have given once this afternoon that the Government will indeed consider the report from the Procedure Committee very carefully and publish our response to it. As regards last Friday, the Under-Secretary of State for Justice, my hon. Friend the Member for East Surrey (Mr Gyimah), was speaking at 2.30 pm, having spoken for 26 minutes. During that time he took seven interventions, including at least two from the Scottish National party Benches, and refused four SNP requests to give way. I would have hoped that, on reflection after the weekend, the hon. Gentleman and his party would be willing to welcome the fact that the Government’s chosen course of moving an amendment to a Government Bill ensures that  the legislative change that the hon. Gentleman and I both want to see will come into effect more swiftly and with many fewer risks that somebody convicted of an offence against a child would receive a pardon than would be the case if we had gone ahead with his hon. Friend’s Bill.

Several hon. Members: rose—

John Bercow: Order. I intend to terminate exchanges on the urgent question 30 minutes after they started. I would like to accommodate all colleagues, but extreme brevity is required. We will be led in this exercise by Mrs Cheryl Gillan.

Cheryl Gillan: The Leader of the House and I entered the House at the same time in 1992 and we spent an awful lot of time in this Chamber, often sitting through the night. Friday is a good constituency day for many Members of Parliament. Would the Leader of the House look at the possibility of debating private Members’ Bills on other days of the week or even in the evenings when Members are here?

David Lidington: As my right hon. Friend knows, that is a subject that has been raised many times. The views and interests of Members vary a great deal on the issue that she has addressed to us.

George Howarth: The Chair and members of the Procedure Committee are to be congratulated on putting forward what I believe are, taken together, a set of good proposals that point the way forward. Will the Leader of the House, who has a reputation as being a reasonable man, acknowledge that the current procedures as they now operate bring this House into disrepute? Does he accept that this short report—the main body of it is only 18 pages long—provides a way forward, and will he undertake to look at it quickly and arrive at what we hope will be a favourable decision as quickly as possible?

David Lidington: We will certainly consider the report as quickly as we can, but equally we want to make sure that we have given serious and proper consideration to the various proposals that the Committee has made. It is important that legislation, whether it stems from Government or from a private Member’s Bill, is thoroughly scrutinised in the House of Commons and enjoys a clear majority of support across the House. It would be wrong for legislation that lacked that support or that scrutiny to hit the statute book.

Mark Harper: You will remember, Mr Speaker, that, before I was fortunate to be in government, I was a regular attender on Fridays. Who knows, now that I am back on the Back Benches, I may well become so again. From my observations it seems to me that the real problem with Fridays is that many colleagues profess support for measures, but do not consider them important enough to bother appearing here in this House of Commons when it is sitting. That is the problem, and Members have it within their own power to deal with that by turning up here and supporting measures that they feel command the support of the House.

David Lidington: My right hon. Friend makes a very good point. Last Friday a closure motion was moved, but only 57 Members were present to vote in its support.

Caroline Lucas: I am surprised by what sounds like complacency from the Leader of the House. He knows that one of the reasons that Members cannot always be here is constituency obligations. When we know that his own Minister is going to talk out a Bill, that devalues this place. More than 130,000 people signed a petition when my National Health Service Bill was talked out earlier this year, so can he demonstrate greater seriousness and greater urgency in tackling this massive area of reputational damage to this House?

David Lidington: I said that we would consider seriously the proposals from the Committee. The hon. Lady needs to reflect on why her Bill failed to get the support of the majority of MPs.

Philip Davies: Does the Leader of the House agree that if people are particularly unhappy about a Bill not getting through on a Friday, they  should have made the effort to turn up to support it, because if at least 100 people turn up to support the first Bill that is taken, it will go through despite any opposition or attempt to block it? Does he agree that it is not too much to expect any Bill that goes through this House to have the support of 100 MPs?

David Lidington: I do not always agree with my hon. Friend, but on this occasion he makes a very reasonable point.

Chris Bryant: The thing is that tens of thousands of people were watching the debate last Friday as though it really were a matter of life and death for them, because it was about their own sense of shame, how society had treated them, and whether they would have a possibility of real exoneration. For all the fine words that we hear about 100 Members and all  the rest of it, the truth is that last Friday brought the House into disrepute. I have no beef with the Minister; the problem is that the system encourages Ministers to do that week after week. The system is bust and it needs mending.

David Lidington: I repeat that as a result of the course that the Government have chosen, Turing’s law will now be enacted within weeks as part of a Government Bill, together with safeguards to ensure that anyone who is not supposed to receive a disregard or pardon will not be able to secure it by subterfuge.

Sarah Wollaston: I fully support my hon. Friend the Chair of the Procedure Committee. Will the Leader of the House respond to the question he has been asked as to whether he accepts that the existing arrangements bring this House into disrepute? I believe that they do.

David Lidington: We will respond in full to the Committee’s report. Over the years, many criticisms of the private Members’ Bill procedure have been made from different quarters. I will take seriously the proposals the Committee has made. However, we also need to ensure that under our procedures, legislation does not reach the statute book, perhaps even creating criminal offences affecting our constituents, unless there is clear demonstrable support within Parliament among a majority of Members for it to be enacted.

Kirsten Oswald: Does the Leader of the House understand that the people watching the unedifying carryings-on in this place when private Members’ Bills, such as that of my hon. Friend the Member for East Dunbartonshire (John Nicolson), are talked out, feel appalled and completely disfranchised? Does he truly think that his Government are acting in good faith in letting this situation continue any longer?

David Lidington: As I said, no complaints were made last Friday about filibustering. The Minister took a very large number of interventions during the course of his remarks, as is his normal courteous practice when speaking from the Dispatch Box. The hon. Member for East Dunbartonshire (John Nicolson), the promoter of the Bill debated last Friday, was told by the Government  about a month ahead of the Second Reading debate that they would not be able to support it as he had at that time envisaged it.

David Nuttall: May I urge my right hon. Friend, when he schedules the debate on the Procedure Committee’s report, to provide sufficient time to allow a full discussion of all the aspects of the private Members’ Bill procedure, because part of the problem seems to be that not every Member of this House fully understands what the procedure is?

David Lidington: It is a good bit of advice to all Members of the House, recently arrived or more senior, to be thoroughly cognisant of its procedures and to do additional homework from time to time.

Ben Bradshaw: As this weekend, yet again, we are plunged needlessly into winter darkness, what happened to the Daylight Saving Bill is a very good example of the Leader of the House being wrong when he says that if a Bill has overwhelming support it can proceed. That Bill did proceed, but the Government killed it by not implementing its provisions. Will he fully accept the recommendations of the Committee in order to restore public confidence and the reputation of this House?

David Lidington: That is obviously a matter for other Ministers, and I shall draw the right hon. Gentleman’s remarks to their attention. However, there was, I recall, very strong opposition in certain parts of the United Kingdom, particularly from Scotland and Northern Ireland, to the daylight saving measure that he supported.

Peter Bone: I voted for the closure motion on Friday. The problem was that there were not enough Members here; that is the reason the Bill did not proceed. However, there are occasions when a Bill does get to Committee and can pass this House on Second Reading but is blocked by the lack of provision of a money resolution. That needs reforming. We need to debate this as soon as possible, because there are areas that do need reform.

David Lidington: The issue of money resolutions was mentioned in the Procedure Committee’s report, so the Government will respond on it in due course.

Alan Brown: Instead of listening, it seems that the Leader of the House is hiding behind excuses about the closure motion not being supported, complacency about filibustering, and the fact that the Minister spoke for 26 minutes. The Minister treated this place, and the viewing public, with contempt. Will the Leader of the House commit to his Government not treating this place with contempt?

David Lidington: I completely reject the aspersions that the hon. Gentleman casts on the Minister, who handled last Friday’s business in a thoroughly reasonable and courteous fashion. The hon. Gentleman might ask himself why, if he and his colleagues genuinely wanted the Bill to reach the statute book, it was published only a couple of days before the Second Reading debate.

Kevin Foster: As a veteran of sitting through talk-outs and the sleep-out, I have seen all sides of the private Members’ Bill process. Does the Leader of the House agree that while there may be merit in the Backbench Business Committee being able to schedule Bills that have widespread support, it must still remain difficult to get it debated, and the key reform is that people should show up to debates?

David Lidington: My hon. Friend makes a very telling point.

Ian Lucas: Is not the real reason there is a bankruptcy of confidence in the private Members’ Bill system that the Government can always kill a Bill by using methods that are sometimes hidden and sometimes open? We need a shaft of sunlight on this system so that we can restore some confidence. Let us have a debate on it.

David Lidington: The convention for many years, under successive Governments, has been that the Government make their view on private Members’ Bills plain during the course of a Second Reading debate. I return to the point that a private Member’s Bill that enjoys genuine majority support within the House has a decent chance of success.

Bob Blackman: This Friday, I will have the opportunity to present my Bill, which has all-party support and has been properly scrutinised before getting to this place. Does my right hon. Friend agree that we should not have a lottery to get serious legislation on to the statute book, but require the case to be argued before a Committee before we get to that stage?

David Lidington: In the light of the Procedure Committee’s recommendations, I would be genuinely interested in whether my hon. Friend’s suggestion represents the view of the House as a whole, or whether more Members feel that they might lose out through the abolition of the lottery, which very many Back-Bench Members in all parts of the House prize as a great annual occasion.

Helen Goodman: When I was briefly Deputy Leader of the House, I had responsibility for private Members’ Bills. I found that, in practice, it was not Ministers in other Departments who were opposed to them, but officials in the Cabinet Office who did not want to devote the time to the briefings. The right hon. Gentleman has the opportunity to be a reforming Leader of the House and to improve on the performance of his recent successors—will he take it?

David Lidington: We shall consider all the recommendations of the Committee and respond within the timescale that the House usually expects.

Jake Berry: As I am someone who, in the previous Parliament, had the privilege of bringing a private Member’s Bill through this place, I hope that the Leader of the House will give serious consideration to reforms to the system. When I listened to coverage of the day’s proceedings on Friday night, my toes curled with embarrassment at the shabby treatment of the Turing Bill.

David Lidington: As someone who has also managed to get a private Member’s Bill on to the statute book, I understand my hon. Friend’s sense of pride. I reiterate that the Government, and the Minister in particular, have nothing to apologise for in the way that Friday’s business was handled. The fact that we now have an amendment tabled in the name of a Liberal Democrat Member of the House of Lords means, most assuredly, that the Turing Bill will be on the statute book much more quickly than if we had resorted to the private Members’ Bill route.

Kirsty Blackman: In too many places the Standing Orders of this House give power to the Government at the expense of Parliament. Will the Leader of the House admit that he will not make changes to the private Members’ Bill process because he does not want the Government to cede any power?

David Lidington: I point out to the hon. Lady that, through such measures as the creation of the Backbench Business Committee and the provision for the direct election of Select Committee Chairs, we now have a Parliament—a legislature—that is more powerful, less deferential and more outspoken than at any time during my 24 years of service.

John Bercow: Jolly good thing, too.

Philip Hollobone: Will the Leader of the House remind the Procedure Committee that there are, in fact, 52 Fridays in any year; that Members can attend all 13 private Members’ Bill Fridays and still have 39 constituency Fridays; and that, given that they involve creating laws of the land and that there are 650 Members, asking 100 Members to turn up to support any Bill really is not too much to ask?

David Lidington: I agree completely with my hon. Friend.

Nick Thomas-Symonds: A constituent wrote to me after last Friday’s filibustering to say, “How on earth can this happen in this day and age?” If the Leader of the House responds positively to the report, will that not at least do something to improve the reputation of this House?

David Lidington: I do not know whether the hon. Gentleman was one of the 57 who voted in favour of the closure motion, or whether he was elsewhere at the time. Anyone who read the Minister’s speech on Friday in Hansard, or his subsequent article in PinkNews, will understand and sympathise with the arguments that he posed and will welcome the Government’s proposed legislation to give effect to the Turing Bill.

Patrick Grady: Is it not the case that the Government accepted the Sharkey amendment simply because my hon. Friend the Member for East Dunbartonshire (John Nicolson) won a raffle? Does he agree that the Procedure Committee’s report brings us closer to the Scottish Parliament system, whereby a Bill that can demonstrate genuine cross-party support can continue to progress through the legislative process, or does he think that that is not the best way to proceed?

David Lidington: The reason we are introducing this legislation is that it was a Conservative manifesto commitment.

Margaret Ferrier: SNP Members regard Friday as an extremely important opportunity to work in our constituencies. It is, therefore, not only frustrating for us, but incredibly disrespectful to our constituents, when private Members’ Bills are talked out. Will the Government look seriously at the report’s recommendations, in particular those that tackle the issue of filibustering?

David Lidington: No complaint was made about filibustering during the debate on Friday. Members on both sides of the House took part, and my hon. Friend the Minister spoke for a perfectly reasonable length of time and took seven different interventions during the course of his speech. The hon. Lady ought to reflect on that and welcome what the Government have done, which is provide a better, surer course of action than that proposed by her party.

Peter Grant: May I correct the Leader of the House? In my speech I explicitly said that if the Bill was deliberately talked out by the Government, what should have been one of the brightest days in this Parliament’s history would become one of its darkest. May I therefore invite him to withdraw the suggestion that no complaints were made during the debate? Will the Leader of the House also confirm that several of the interventions that the Minister took were specifically from Back Benchers pleading with him to sit down, stop filibustering and give the democratic, elected Chamber the chance to make a decision?
Given that the Leader of the House is convinced that if a Member cannot get 100 Members in here to support a Bill, it does not deserve to go through, will he tell us how many Members were in this Chamber last night when the Health Service Medical Supplies (Costs) Bill was given its Second Reading?

John Bercow: Order. That last point has absolutely nothing to do with the Procedure Committee report. I am sure that the coming off of the topic was entirely inadvertent on the part of the hon. Gentleman, and it therefore requires no reply.

David Lidington: We will respond to the report in due course. The problem with the Bill that was debated last Friday is that it was flawed, in that it would have made it possible for people who are living today to receive a blanket pardon, even if they have been properly convicted of offences against minors or offences involving non-consensual sex. That is why the Government consistently took the view that the disregard procedure needed to be followed, and why we have taken swift action to provide for such a scheme though proposed Government legislation to give effect to the Turing Bill.

AIRPORT CAPACITY

Chris Grayling: With permission, Mr Speaker, I would like to make a statement about airport policy.
Last year, the independent Airports Commission delivered its final report under the chairmanship of Sir Howard Davies. I would like to pay tribute to the quality and professionalism of the commission’s work and express my thanks to all its members. The commission concluded that we need more capacity in the south-east and put forward three viable options for expansion. It unanimously agreed that the proposed north-west runway at Heathrow presented the strongest case. In December, my predecessor came to the House to announce that the Government accepted the commission’s assessment of the need for additional capacity, but made clear that further work was required before a decision could be made on the location of a new runway. That work is now complete.
This is a momentous step for our country. The decisions taken earlier today, which I shall outline in a moment, are long overdue, but they will serve our country for generations to come. I know that some Members have strong convictions on this issue and that everyone in this House will understand the significance of this announcement for jobs; an economy that works for everyone; passengers; the global importance of our country; the environment; and people affected by expansion. It also sends a very clear message that this country is open for business.
It is not an easy issue or a simple process. I make no apologies for the fact that we have taken time to get it right, but today also shows that this is a Government who are unafraid to take difficult decisions and get on with the job. Before I outline the decision that the Government have reached, I want to explain how today’s announcement fits within the planning process and the opportunities that Members will have to contribute.
In the new year, we will bring forward a draft national policy statement, which will include the details of the proposed scheme. As required under legislation, it will be subject to a full and extensive public consultation, followed by a period of parliamentary scrutiny. Only once Members have voted on the final national policy statement and it has been designated will the airport be able to make a detailed planning application.
Strong connections with global partners and the ability to trade with new and growing markets are vital to securing Britain’s place in the world. The UK currently has the third largest aviation network in the world—second only to the United States and China—contributing more than £22 billion to UK GDP. We have the second largest aerospace manufacturing sector, which generates annual exports of £26 billion. Our aviation industry supports almost 1 million jobs and invests £1.7 billion every year in research and development. Last year, UK airports handled more than 250 million passengers—up 5% on 2014—and 2.3 million tonnes of freight.
Heathrow is the busiest two-runway airport in the world, and Gatwick the busiest single-runway airport. Indeed, the London system will be almost entirely full by 2030, with the exception of a small amount of capacity at Luton, and that will be taken up soon  afterwards. If we do nothing, the cost to our nation will be significant, amounting to more than £20 billion over 60 years through delays, fewer flights and passengers having to fly from airports elsewhere. In addition, the wider impacts on our economy will be in the region of £30 billion to £45 billion. That is why the decision we have reached today is so important to the future of our country, not just to tackle the immediate shortage of airport capacity, but to set our country on a course to even greater prosperity for future generations.
I have spent a considerable amount of time this summer visiting the different schemes, talking to their promoters, and assessing their strengths and weaknesses. I have been genuinely impressed by the quality of choice available to us and the detailed work that has been put into the three plans. Any one of them would bring benefits to our country. At the end of its work, however, the Airports Commission made a clear and unanimous recommendation to the Government—that we should accept the proposal to build a new north-west runway at Heathrow, subject to a package of measures to make expansion more acceptable to the airport’s local community. Since the publication of that recommendation, my Department has studied in detail not only the report, but new and supplementary information that has emerged about the different options since.
The commission’s report and the subsequent information formed the basis of the discussion that took place this morning at the Cabinet Sub-Committee. As a result of that discussion, the Government have decided to accept the recommendation. We believe that the expansion of Heathrow airport and the north-west runway scheme, in combination with a significant package of supporting measures on the scale recommended by the Airports Commission, offers the greatest benefit to passengers and business, and will help us to deliver the broadest possible benefit to the whole United Kingdom. That approach will deliver the greatest economic and strategic benefits for our economy. It will strengthen connectivity for passengers right across the United Kingdom. It offers a major boost to freight operators. It can be delivered within carbon and air quality limits and, crucially, it comes with world-leading measures to limit the impacts on those living nearby.
In addition to the benefits identified by the commission, the scheme will deliver the connectivity and hub capacity that the UK needs to compete with fast-growing European and middle eastern hubs. The airport’s location means it is more accessible to business and the rest of the United Kingdom by both road and rail. Access to Heathrow is more resilient, and it is better placed as the national freight hub. Ultimately, the proposal will bring the largest benefit to passengers and the wider economy: up to £61 billion over 60 years. But we are not alone in this view. UK airlines and businesses are also clear that Heathrow is the right place to expand.
Before I continue, I would like to pay genuine tribute to the promoters of the other two schemes considered by the Sub-Committee. As I have said, both presented well-developed and compelling cases for new capacity. In particular, I would like to place on record the fact that Gatwick, despite not being selected today, remains a key part of our national transport picture and will continue to do so in the future.
I want to be clear that expansion will not be at any cost to local people, to passengers or to industry. We have to make three assurances. The first is about making  Heathrow a better neighbour. We must tackle air quality and noise, and meet our obligations on carbon both during and after construction. Air quality is a significant national health issue that the Government take immensely seriously. That was why we undertook further work, which confirms the commission’s original conclusion that a new runway at Heathrow is deliverable within air quality limits. We remain committed to ensuring that that remains the case. The airport has already committed to industry-leading measures to mitigate air quality impacts. Furthermore, the Government will grant development consent only if we remain satisfied that a new runway will not impact on the UK’s compliance with its air quality obligations.
The broader issue of air quality is something that the Government take very seriously, and the updated evidence base shows clearly that the biggest challenge we face is not the expansion of an airport, but the levels of emissions in urban areas more generally. That is the very reason for our national air quality plan. As part of our ongoing work on air quality, my Department has embarked on a joint project with the Department for Environment, Food and Rural Affairs and the Treasury to identify further ways in which we can tackle the issue. By the time a new runway opens in the next decade, we intend to have made substantial progress on tackling such air quality challenges across our nation as a whole.
On the issue of noise, no airport can be silent, but technology is making aircraft quieter. The new generation of aircraft coming into service have a noise footprint that is typically 50% smaller on departure, and at least 30% smaller on arrival, than that of the aircraft they are replacing. Although planes are getting quieter, however, they still have an impact, which is why we will expect a six-and-a-half hour ban on scheduled flights each night to be a requirement for development consent. That would also see the airport held to clear and legally enforceable noise performance targets. Even with expansion, therefore, fewer people will be affected by aircraft noise than is the case today. We also recognise the importance of providing local residents with a clear, predictable timetable of respite from aircraft noise. That is something local communities value, and we will ensure that it continues once a new runway is built.
I recognise that the decision will have a big impact on people who live close to Heathrow, which is why we have insisted on a world-class package of supporting measures. Communities affected by the decision will be supported by up to £2.6 billion towards compensation, noise insulation for homes and schools, improvements to public facilities and other measures. For those whose homes need to be bought to make way for the new runway, Heathrow plans to pay 25% above the full market value of those homes and to cover all costs, including stamp duty, moving and legal fees. That offer is significantly above the statutory requirement. In addition, I can announce the creation of a community compensation fund. Local authorities will benefit from our policy of local retention of business rates.
The second assurance is on costs for airlines and passengers. A new runway will bring in new capacity to meet demand and allow for greater levels of competition, which will lower fares relative to no expansion, even after the costs of construction are taken into account. This is an investment in our country’s future. It will deliver major economic and strategic benefits to the UK, but they must be delivered without hitting passengers  in the pocket. The Airports Commission has made it clear that that is achievable, as has the Civil Aviation Authority. It is important to send the message that this is not expansion at any cost, but the right scheme at the right price. I expect the industry to work together to drive down costs for the benefit of passengers. As the regulator, the CAA will have a vital part to play in achieving that and ensuring that new capacity fosters competition. Its aim should be to deliver a plan for expansion that keeps landing charges close to current levels, and I have full confidence in its ability to do so.
The third assurance is about how the expanded airport will benefit the whole of the UK, not just by creating jobs across the airport’s UK-wide supply chain, but  by giving even more of the UK access to important international markets by strengthening existing domestic links and developing new connections to regions that are not currently served. The airport expects to add six more domestic routes across the UK by 2030, bringing the total to 14. That will strengthen existing links to nations and regions such as Northern Ireland, Scotland and the north of England, and allow the development of new connections to regions such as the south-west.
I am determined that Heathrow will meet those pledges and that the Government will hold the airport to account on them. Furthermore, the Government will take all necessary steps, including, where appropriate, ring-fencing a suitable proportion of new slots for domestic routes through public service obligations to enhance connectivity within the United Kingdom. It is important to stress that this is a decision in the national interest; it is not just about the south-east of England.
A new runway will strengthen the aviation sector across the whole nation, but we need to do even more. Our airspace is out of date. Modernising it will boost the sector and help to further reduce noise and carbon emissions. We will soon introduce proposals to support improvements to the airspace and to manage noise, which will include a consideration of the way in which affected communities can be engaged and whether there is a role for a new independent aviation noise body such as the commission recommended.
Let me turn to what happens next. There have been recent suggestions in the media that the process has been slowed down or somehow delayed. In fact, the opposite is true. Members will remember the saga of the planning process behind terminal 5, which took years to resolve. Following that, the national policy statement process, which was created by the previous Labour Government in the Planning Act 2008 and improved through the Localism Act 2011, was designed to speed up major projects, but in an open and fair manner. By setting out now why we believe that there is a need for new runway capacity, along with the supporting evidence, we will fulfil our legal obligations to consult the public and allow Members to vote on the proposal before it becomes national policy. That is what the law requires. That means that Heathrow will be able to submit a planning application safe in the knowledge that the high-level arguments have been settled and will not be reopened.
Today, the Government have reached a view on their preferred scheme, and the national policy statement that we will publish in the new year will set out in more  detail why we believe it is the right one for the UK. It will also set out in more detail the conditions we wish to place on the development, including the supporting measures I outlined. We want to make sure that we have considered all the evidence and heard the voices of all those who might be affected and, of course, of those who will benefit. The consultation will start in the new year, and I can announce today that I have appointed Sir Jeremy Sullivan, the former Senior President of Tribunals, to oversee the consultation process. This is an independent role, and Sir Jeremy will be responsible for holding the Government to account and for ensuring that best practice is upheld.
The issue of runway capacity in the south-east has challenged successive Administrations for decades. There are strong feelings both for and against a third runway at Heathrow. This is not the scheme that was previously promoted in 2009. It does much more to mitigate environmental impacts, to compensate communities and to distribute benefits across the nation. This is an issue of vital national interest that touches every part of our United Kingdom. It is vital to the economic prosperity and global status of our nation, and I commend this statement to the House.

Andy McDonald: Although I thank the Secretary of State for giving me advance sight of his statement, it cannot pass without comment that this decision has been widely leaked throughout the media during the past number of hours in advance of it being sent to me and of being announced to the House. It is simply unacceptable for such a decision to be announced in this manner; it is totally disrespectful to Members and the House. Be that as it may, aviation is crucial to our nation’s economy and our future as an outward-looking trading nation. That will be even more the case in the light of the vote to leave the European Union, so we welcome the fact that a decision on the preferred location has now been made. I hope we can put the years of procrastination and delay behind us.
Despite the Secretary of State’s proclamation that the work is now complete, today’s announcement is not the end of the process, but merely the start of it. It beggars belief that it has taken Ministers more than a year since the publication of the Davies report even to make a start. Just what have they been doing for all these months, apart from worrying about splits in the Cabinet, or about the Foreign Secretary throwing himself in front of the bulldozers and former mayoral candidates triggering by-elections? There is no justification for dithering on this scale. The Secretary of State has failed to provide the shorter timescale for getting to the national policy statement that was set out by the Transport Committee.
We cannot bring back the time that Ministers have already wasted, so over the coming months it will be vital that there is proper engagement, and full and fair consultation with all the interested parties, so that we secure an outcome that stands the test of time. It is essential that there is proper forensic examination and scrutiny. Labour has consistently said that support for any such decision will be conditional: first, on sufficient capacity being delivered; secondly, on meeting the UK’s legal climate change obligations; thirdly, on local noise   and environmental impacts being managed and minimised; and, fourthly, on the benefits not being confined to London and the south-east.
Labour fully recognises the need for runway expansion in the south-east of England, but following today’s announcement, it could be a decade before an additional runway is operational. We face capacity challenges here and now, but we heard nothing in the Secretary of State’s statement about how the Government intend to tackle the immediate shortage of airport capacity. What are his plans to utilise existing capacity in the south-east at Stansted and Luton—and, indeed, elsewhere?
There was also no mention of more utilisation of our international gateways. What message does that send to Stansted, Manchester, Birmingham and East Midlands, and what message does it send about the Government’s commitment to the so-called northern powerhouse and the midlands engine? Surface access to many of our international gateways around the UK needs improving, yet it is unclear what action the Government are taking. That is why Labour is calling for the new National Infrastructure Commission to examine the road and rail needs of airports outside the south-east. I urge the Secretary of State to support that proposal as well as Labour’s call to update the West Anglia line to improve rail services to Stansted, and to have better connectivity to Luton airport.
The Government must ensure that we do not fall short of our legal climate change obligations. We have but one planet, and it is essential that the UK plays a leading role in ensuring that agreed reductions in carbon emissions are met. Sustainable Aviation believes that UK aviation could reduce its carbon dioxide emissions by up to 24% by 2050 through the deployment of sustainable alternative fuels. Other countries have made considerable progress but, sadly, the lack of commitment and clarity from our Government caused the collapse of the British Airways green sky project. May we hear more from the Government about what steps will be taken to meet our climate change targets, particularly on developing sustainable fuels and progressing the consultation on the inclusion of aviation in the renewable transport fuels obligation?
After the Davies commission, the Government announced that they wanted to look further at environmental matters and, in particular, at air quality. As was revealed in The Guardian last week, David Cameron’s former policy adviser at No. 10 warned the then Prime Minister a year ago that he was “exposed on Heathrow”, because the Government did not have an answer about the effect on air quality. Indeed, the need for further work on air quality was the reason given for the delay, yet there was not a single reference in the Secretary of State’s statement to explain what work on that has been completed or how such work has informed his position. Will he publish—I hope he will—the additional work that he tells us the Government have done post-Davies so that those inside and outside the House can scrutinise it properly?
It is essential that the unacceptable levels of nitrogen dioxide and particulates from diesel engines are reduced because their direct impact on the health and wellbeing of tens of thousands of citizens simply cannot be ignored or tolerated. Direct measures are needed to lower emissions across the nation, especially in areas  with a high concentration of emissions. I urge the Secretary of State to be unrelenting in his pursuit of improved air quality.
The commission recommended establishing an independent aviation noise authority, so will the Secretary of State immediately advise us about the Government’s intentions in that respect? Our air traffic management infrastructure is ancient, and modernisation would secure great dividends not only in terms of carbon emissions, but through considerable mitigations on noise and air quality. What steps is he taking to ensure that the modernisation that is so urgently needed is prioritised and progressed?
On our fourth test that the benefits of expansion are not confined to London and the south-east, it is essential that landing slots affording better connectivity and trading links for our nations and regions are maintained in the longer term. Any assurances that the Secretary of State can give in that respect would be most welcome. Will he also assure the House that the entire UK will be afforded a proper opportunity to engage in the construction process? Perhaps some of the HS2 Ltd protocols can  be adopted. You never know, but we might be using UK steel.
The location of an additional runway cannot be the sum total of aviation strategy, so I urge the Secretary of State to press ahead with the full range of measures that are necessary to sustain our successful aviation industry. We must also ensure that the best interests of all the United Kingdom are served, and that the legitimate environmental concerns that have been raised, and that will continue to be raised, are fully addressed. We must do all that we can to protect our precious planet for the generations to come.

Chris Grayling: I will start with the point about the announcement. You know, Mr Speaker, how seriously I, as a former Leader of the House, take such issues. You will also be aware that this matter is highly price sensitive. Indeed, when the Airports Commission published its initial reports, they were launched in a way—they were announced at the start of the morning—that was consistent with a market announcement. That is the approach we have taken with this announcement. I have come to the House at the earliest opportunity to make a statement, and I will take all the questions that Members have for me.
On the timeframe, the hon. Gentleman asked me what we have been doing for the past year. We have been doing precisely what he asked about: working on the issue of air quality. Today and over the coming days, we will publish additional material so that Members, the public and others who are interested will be able to scrutinise in detail the work we have done and the route we have followed to reach this conclusion. Given the particular importance of air quality, he would expect us to make sure that we had done the additional work to satisfy ourselves that this can be done in line with what we all accept are our necessary priorities for reducing emissions levels.
The hon. Gentleman talked about what will happen during the coming months. As I said earlier, yes, there will be a full and proper consultation. That consultation is set out clearly in statute—[Interruption.] Despite the murmurings of Opposition Members, the consultation is set out in an Act that Labour rightly passed to improve  the process of going ahead with such a national project. That is the process we will follow. We will do so in as timely a way as we can, but we cannot short-change a process set out in primary legislation.
On the capacity challenges here and now, there is absolutely nothing to stop new routes being set up tomorrow. We have capacity at Stansted, and new routes have come into Heathrow and Gatwick in the past 12 months. We are not preventing the airports around London that still have capacity—

Richard Burden: You’re not doing anything!

Chris Grayling: The hon. Gentleman talks about not doing anything. With respect, the Opposition do not appear to understand that the airports themselves go out to sell opportunities around the world and bring in new routes. The leaderships of those airports sell Britain as a great destination to fly to and do business in. They will carry on doing that.
There are clearly some big surface access issues to address in connection with this new scheme. However, I remind the hon. Member for Middlesbrough (Andy McDonald) that we are close to completion of Crossrail, which will make a major difference to connectivity to Heathrow, we will shortly be starting improvements to the M25 between Heathrow and Gatwick, and the new Thameslink routes are due to open in about 18 months’ time, which will significantly improve links to Luton airport. Things are already happening to improve surface access links to our airports.
Climate change is a very important issue that we take very seriously. I was delighted by the agreement reached at the International Civil Aviation Organisation summit in Montreal recently, which sets a way forward for the aviation industry with international agreement. That is a significant step forward. We agree that a significant challenge remains that we must monitor very carefully, but the Airports Commission said very clearly that the expansion could take place and we could meet our objectives. That is what we intend to do.
The hon. Gentleman mentioned sustainable fuels, and good work is being done on those, by Virgin in this country, for example, and by airlines around the world. The technology will improve as the years go by.
The hon. Gentleman asked what we are doing on air quality. I agree with him that it is a bigger issue for our country, affecting very many of our urban areas. It requires a broad-ranging response to deal with it through clean air zones, as set out in our national air quality strategy, and other measures that we are working on that go beyond that strategy and continue a process of improvement over the coming decade.
I said in my remarks that I would consult on a noise authority and that we would bring forward plans for airspace modernisation. On regional connectivity, I am happy to restate our commitment to hon. Members from Scotland, Wales, Northern Ireland, northern England and the south-west. We are very clear that this expansion must include binding provision for links to those parts of the country. This has to be a benefit to the entire   United Kingdom and it will be. On the hon. Gentleman’s last point, Heathrow airport is committed to ensuring that the project will be built using UK steel.

Alan Haselhurst: Will my right hon. Friend acknowledge, in the light of the very courageous decision he has announced to the House, that in the 10 years before the extra runway at Heathrow is available great pressure will descend upon Stansted, to which he has referred? Does he understand that my constituents will expect the same level of compensation and care for them against noise disturbance, and wish the recommendations of the West Anglia task force to be implemented as soon as possible, as life will otherwise become intolerable for everyone on that railway line, whether passengers, employees at the airport or regular commuters?

Chris Grayling: My right hon. Friend has been a passionate advocate for the communities around Stansted for a very long time; I remember visiting the airport with him when I shadowed this brief a decade ago. This is something we must be immensely sensitive to, and I give him a commitment that we will be. We are now looking very carefully at the proposals he was involved in shaping and the set of recommendations that he published recently. I want everything done as soon as is practical to make sure that the links to Stansted are as good as those to London’s other airports.

Drew Hendry: I welcome the Secretary of State to his place and thank him for early sight of his statement. After what has been world-leading prevarication from his Government, we welcome this decision, which finally almost ends what the Scottish Chambers of Commerce has called the “economic illiteracy” of failing to make a decision. True to form, however, the Government’s indecisiveness could not resist one last piece of bad taste fudge to stick in people’s throats. The lack of a vote in this House for more than a year will not allow people and companies a true end, and the soap opera will therefore continue.
That said, we welcome the announcement of Heathrow as a preference. Although airport expansion of this type disproportionately benefits the south-east of England, it has strategic consequences for Scottish air routes. In preparation for this announcement, and after more than 18 months of meetings with, among others, airports, campaign groups, business bodies and the UK Government, the Scottish National party Scottish Government have agreed a memorandum of understanding with Heathrow that will bring, among many other things, jobs, an engineering hub and route support to Scotland.
It is now time for the UK Government to ensure a full and fair deal for Scotland. We must see a commitment to addressing those needs. A lot is required. Will the Secretary of State commit to meeting the following wider challenges? First, as he has intimated, will he work with me and the Scottish Government to develop genuine route support and public service obligations, and address Scotland’s needs in relation to this development? Secondly, will he make a proper commitment to supporting aircraft biofuels and giving genuine encouragement to carbon-reducing technology in aircraft? Thirdly, will he   go further than he did in his statement and commit to starting immediate work to replace the airspace strategy for the UK, which is more than 50 years old?

Chris Grayling: I am grateful to the SNP for its support for today’s announcement. The hon. Gentleman talked about the lack of a vote. I remind him that this is the law. We are following a process that is set out in statute—he is surely not suggesting that we should not follow that process. We will do so in as timely a way as possible, but we have a duty to follow primary legislation.
The hon. Gentleman talked about the benefits the expansion can bring to Scotland. I absolutely agree and will be delighted to work with his party and my counterparts in other parties in Scotland to ensure that Scotland gets a good deal out of all of this. It is not just about Scotland, however, but about the whole United Kingdom. It is about Northern Ireland. It is about making sure that skills development happens in Wales. It is about ensuring better links to the south-west of England, and good links to the north-east—I am going to Newcastle tomorrow, and the north-east is one region that I hope will benefit from today’s announcement. This is about the whole United Kingdom and so I have every intention of ensuring that our work is about the whole UK.
The hon. Gentleman raised the airspace modernisation programme. The CAA has already started preparatory work on that, and we need to press ahead with it, not simply because of today’s announcement but because we need to change many of the things that unnecessarily use up fuel and cause additional carbon emissions, such as the stacking structures. That work is beginning. We will consult on it extensively over the next two years. That modernisation has to happen alongside the development of the runway plan.

Zac Goldsmith: The Government have chosen a course that is not only wrong but doomed. It is wrong because of the million people who will suffer directly on the back of the environmental harm this project unavoidably produces. It is doomed because the complexities, cost and legal complications mean that the project is almost certainly not going to be delivered. I believe it will be a millstone around the Government’s neck for many years to come—a constant source of delay, and of anger and betrayal among those people who will be directly affected. There are so many questions one could ask at a statement of this sort that I would not know where to begin, so I simply use this opportunity to put my absolute opposition on the record.

Chris Grayling: I very much respect the sincerity of the views that my hon. Friend holds and the commitment he has made to his constituents on this issue. I know how strongly he will disagree with the decision we have taken today. I hope that he will at least respect the fact that all of us in politics have to do what we believe is right. I am doing today what I believe is right. His views are very much what he believes is right. Not all of us can get it right all of the time, but we have to do what we believe is best for our country, and that is what I am doing now.

Lilian Greenwood: The decision to build a new runway at Heathrow is the right one, but it is absolutely vital that the Secretary of State   delivers on his pledge to ensure that the benefits of expansion are felt in every nation and region of the UK. The Davies commission noted the difficulties in reserving slots for domestic flights from regional airports posed by the EU slot regulations. Now that the UK has voted to leave the EU what assessment has he made of the decision for potential measures to protect and enhance domestic connectivity?

Chris Grayling: The slot issue is one avenue for us to follow. We want to have a detailed discussion with regional airports, airlines and Heathrow itself about the best mechanism. I am absolutely clear that the planning consents, which I hope and believe will eventually be granted, and the national policy statements we prepare must contain provisions that protect connectivity. We need to work out the best way of doing it. It is not just about having a handful of slots at 11 o’clock at night; it is also about connectivity with international flights. We have to get this right for the whole United Kingdom and I give a commitment that that is what our agenda will be.

Stephen Hammond: Respected outside experts have estimated the need for £11.5 billion of taxpayer support for the third runway and even the Airports Commission suggests up to £5 billion, yet post the Cabinet meeting this morning, the Government website says that the expansion costs will be paid for by the private sector. I listened carefully to the Secretary of State’s statement, but he did not reiterate that commitment. Will he tell the House how much the taxpayer will have to put in for runway three and the associated surface works?

Chris Grayling: The most fundamental point is that Heathrow has committed, and will be held, to a plan that: first, does not increase the current level of road transport to the airport; and, secondly, increases public transport access to the airport to 55% of those using it. Those will be obligations that it will have to fund. The Government’s financial advisers have said that that is viable and investible. There are question marks about what schemes are actually part of the surface access. Some of them we have to do anyway. For example, we are about to start improvements to the M4, which will benefit Heathrow and improve access, but they are not solely about Heathrow. There are, however, some very clear obligations in terms of actual deliverables that the airport will have to meet and pay for.

Nigel Dodds: I welcome the fact that the new Government have made this important decision and I welcome the fact that they have made the right decision. In Northern Ireland, there is a wide consensus that Heathrow is the right decision. It will lead to thousands more jobs, and major investment in tourism and business. I therefore warmly welcome what the Secretary of State has said. I also welcome what he said about slots and domestic connectivity, but may I press him on whether there will be any Barnett consequentials through investment and infrastructure?

Chris Grayling: First, I am very grateful to the right hon. Gentleman for his support, and for the support of his party and colleagues in Northern Ireland. It is very much my belief that Northern Ireland will benefit  enormously from this decision, and so it should. I hope it benefits not simply in terms of connectivity: I hope to see some of the work being done in Northern Ireland as we aim for a UK-wide supply chain and encourage the airport to achieve that. On other aspects, we will work hard to ensure that we deliver the best possible outcome for all parts of the United Kingdom, that we listen and consult, discuss issues such as the one he raised and try to make sure it is as beneficial as possible to the people he represents.

Crispin Blunt: As the chair of the Gatwick co-ordination group, I congratulate my right hon. Friend on this announcement and make clear to him the relief with which this somewhat overdue statement will be received by all the people represented by colleagues in the group. It will have been clear that keeping Gatwick in the game has delivered welcome improvements in the Heathrow proposition, but, as everyone who uses the Brighton main line will know, the Gatwick proposition, frankly, was not practical. Local authorities would have had to have found housing for the workforce to support the Gatwick option. Before this process began, Gatwick management ran the best single runway airport in the country and had a very good set of relationships with local communities. Will he now invite Gatwick management to go back to those priorities now that the scheme is over?

Chris Grayling: My hon. Friend has strong feelings about Gatwick expansion, as did many of those in his constituency and in his neighbouring constituencies. What I would like to say about Gatwick is that we need to understand the important role it plays in the economy of the southern part of the country—the Surrey-Sussex economy—and in the economic development of that area and the south coast. I recognise the very real amount of work that Gatwick airport put into its proposal, which, as I said, was very impressive and carefully crafted. I know it will be immensely disappointed with today’s decision. As I said earlier, I believe Gatwick will continue to be a really important part of our transport infrastructure and I send it all my best wishes.

Several hon. Members: rose—

John Bercow: Well over 50 colleagues are still seeking to catch my eye and I am keen to accommodate them, but doing so will be brevity-dependent.

Seema Malhotra: The Secretary of State said in his statement that he plans to bring forward proposals to support improvements to air space and how to manage noise, including the way affected communities, such as mine in Hounslow, can be best engaged. He stated that that would include consideration on whether there is a role for a new independent aviation noise body, but he also said that the commission had recommended one. Why has that been downgraded?

Chris Grayling: I have not downgraded it. I want to make sure there is proper independent noise monitoring. It is just a question of working out the best way to do  that. The commission did not set out detailed plans. I will be discussing with interested parties how best to secure that.

Graham Brady: A global trading nation clearly needs world class infrastructure and I think this is the right judgment in the national interest. Will my right hon. Friend reflect on the damage done to our international competitiveness by this country maintaining the highest level of taxation on aviation?

Chris Grayling: Air passenger duty creates a lot of debate in this country. I am absolutely certain that none of us on the Conservative Benches would wish to maintain any tax higher than we needed to. We are, by instinct, a low-tax party, but we are also dealing with some quite challenging financial and public finance circumstances and therefore cannot always do the things we wish to do. Nevertheless, I am sure the Chancellor will have heard my hon. Friend’s wise words, ahead of planning for the next two financial moments.

Caroline Lucas: In 2009, the Committee on Energy and Climate Change suggested that a maximum 60% air passenger growth to 2050 could be compatible with UK climate change goals, provided various fantasy conditions are met. However, the Government’s own analysis shows that even without a new runway there will be 93% growth by 2050. That implies that aviation will take up to two-thirds of the UK’s entire carbon budget in 2050, a scenario that is quite simply incredible. Given that the Committee advised against taking international offsetting as a substitute for domestic action, will the Secretary of State explain how this decision can possibly be compatible with our climate change objectives?

Chris Grayling: We listened to the Airports Commission, which did detailed work on this. It recommended that this was an approach we could take and meet our obligations. We have validated that work since and we still believe that to be the case. I was encouraged, as I said earlier, by the ICAO agreement, which I hope will make it easier for the aviation sector to meet those obligations.

Cheryl Gillan: The business opportunities arising from the expansion are substantial for Buckinghamshire. Bucks Business First and the Buckinghamshire Thames Valley local enterprise partnership have both welcomed today’s announcement. It will continue to reinforce Buckinghamshire as a prime location for businesses to locate to. However, will the Secretary of State undertake to do an assessment of the impact on the local economy of the potential disruption and cumulative effect of having two major projects, namely Heathrow expansion and HS2, being constructed within the same timeframe and in close proximity?

Chris Grayling: Clearly, we have to work to ensure that the impact of two major projects on surrounding communities is minimised to the maximum possible extent. I know everyone involved in both projects will seek to do that. Undertaking two ambitious, modern future-looking projects is a sign of the direction that  defines the approach we are taking to governing the country. We want to prepare for a stronger and better future for Britain.

Andy Burnham: Is not the biggest loser from the Tory civil war over Heathrow neither the Foreign Secretary nor the hon. Member for Richmond Park (Zac Goldsmith) but transport everywhere else? For over five years, there has been an obsessive focus on London and the south-east. While welcoming this decision, may I ask the home counties-based Cabinet to listen to what William Hague has said today, and set out in the autumn statement a clear timetable for HS3, linking Manchester Airport to the great cities of the north?

Chris Grayling: I am not sure that Manchester Airport needs to be linked to the great cities of the north, since it is in one of the great cities of the north. Let us be clear first about what we are doing in the north. Across the north of England, a wide range of essential transport projects are happening: £350 million is being spent on improving the rail network in the right hon. Gentleman’s home city of Liverpool, and the construction of the link road between the M56 and the M6. Those are two long overdue projects. He knows that support for the next generation of the Manchester Metrolink is also happening. This is a Government who are doing things for the north of England. I have to say that if I look back on the Labour party’s years in government, I see that these projects were always on the drawing board but never actually happened.

Tania Mathias: I believe that this decision is misguided and not ultimately in the nation’s interests. Will the Secretary of State assure me that in the consultation and scrutiny to come there will be good and adequate scientific data, because the evidence will show that Heathrow expansion is neither possible nor deliverable? In the Minister’s words, we do not want expansion “at any cost”; this is the wrong scheme and the price is too high.

Chris Grayling: I know how strongly my hon. Friend feels about this issue. I give her an assurance that we will do this job properly. The appointment of Sir Jeremy Sullivan—an exemplary former judge who led an important part of our judicial system, as those who know him will acknowledge—will, I hope, give people comfort that we intend to take the consultation process properly and seriously.

Hannah Bardell: The Secretary of State will know of my campaigning on the establishment of an independent aviation noise authority. About 70% of Edinburgh airport’s traffic goes over my constituency, and a recent flight path trial—the first in 40 years—caused havoc. This noise authority is for everyone in the UK; it should not be dependent on this decision. Will the Secretary of State include me in the discussions as an interested party and bring them forward as soon as possible?

Chris Grayling: Absolutely. Every Member will be included in the discussions as part of the consultation process. I will happily do what the hon. Lady asks.

Roger Gale: I congratulate my right hon. Friend on taking the right decision in the interest of the United Kingdom. Will he remind us of  how much passenger traffic, and particularly freight traffic, is currently being lost to mainland European airports as a result of lack of capacity in our south-east? Does he agree that in order to bridge the gap, we need to use all the currently available capacity?

Chris Grayling: My hon. Friend is absolutely right. It is important for people to understand this issue. It is sometimes argued that connecting traffic does not add value to the United Kingdom. However, connecting traffic combined with our own domestic traffic can often make viable a new route to an important trading centre. Winning back some of those transfer passengers in order to ensure that routes to developing markets can be opened up from this country is therefore an important part of securing our trading future.

Ruth Cadbury: With news of the replacement of the route to Chengdu with a new route serving New Orleans, why are the Government putting the commercial interests of an expensive airport whose primary passengers are tourists ahead of the health and quality of life of 300,000 people, the costs to passengers and the costs to the taxpayer?

Chris Grayling: I have talked to the boss of IAG, the parent company of British Airways, about the Chengdu decision. It has a number of routes to China and other parts of Asia. It has simply taken a commercial decision that the Chengdu situation has not proved viable. The issue is not about an individual route, but about connectivity for the future and the opportunity to open up new possibilities. It will not always be British Airways that opens up those routes; other airlines might choose to fly from developing markets to the United Kingdom. Those are the opportunities that we will need for the future. That is why we believe that expansion is necessary. If we are to open up new trading opportunities around the world, we must have the capacity to offer those new links. If we look at the price at which a slot trades at Heathrow airport, we realise that demand far exceeds supply.

Jeremy Quin: I, too, congratulate my right hon. Friend on taking a decision that is absolutely rooted in the national interest. Will he confirm that Heathrow has the support of all three of the devolved Administrations?

Chris Grayling: My hon. Friend is absolutely right. It does have that support, as well as support from business and the trade unions. That is not to say that the Gatwick proposals were not strong or attractive, but the Heathrow option was undoubtedly the one that gained the most support.

Ben Bradshaw: Heathrow has clear advantages over Gatwick for the south-west of England, both in respect of access to Heathrow and the hoped-for slots for our regional airports such as those at Exeter and Newquay to connect internationally. The Secretary of State must say much more about what he is going to do about air quality. He is quite right to say that road transport contributes by far the bulk of our emissions and our pollution, but he has not today said a single thing or produced a practical policy to tackle road transport and diesel in particular.

Chris Grayling: If the right hon. Gentleman wants a specific example, I can tell him that this morning we published the consultation document that will pave the way for significant expansion of the availability of electric charging points around the country. My view is that we all need greater diversity of our car fleet for the future, and we are already moving ahead with plans for low-emission zones in our cities. This is not an airports issue but a national one, and active measures are already in place to encourage diversification of the car fleet. Electric vehicles are being built in this country—for example, the Nissan Leaf is being built in Sunderland, which is the main centre in Europe for the production of that vehicle. We are seeing more and more of these cars on our streets, and I think that will continue into the future.

Kwasi Kwarteng: I commend my right hon. Friend for his strong statement. It is great to see the Government making some forward progress on this issue. Will he assure my constituents and many people in the local area that full consideration will be given to the environmental impact and noise control?

Chris Grayling: It is really important to find the right balance. Around Heathrow, a large number of people, particularly those who work there or whose family members work there or whose businesses depend on the airport, support the expansion. There is a significant amount of support for what I have announced today, but those people will rightly expect that we ensure we look after the environment in which they live, that appropriate compensation will be in place where necessary and that appropriate measures are in place to support local communities. I give my hon. Friend an absolute assurance that that will be the case.

Caroline Flint: Hallelujah—a decision has been made. The right hon. Gentleman should be in line for a “Minister of the Year” award. This is good news for Doncaster, good news for the north and good news for the UK. However, when we look at investment in infrastructure, we find that Crossrail costs £15 billion—nine times the combined expenditure for the rail projects planned for Yorkshire and the Humber, the north-east and the north-west. We see this as an opportunity for our regional airports, including my own, so will the right hon. Gentleman meet me and other MPs with regional airport interests to discuss how we get people to our airports to take advantage of the new slots?

Chris Grayling: We would be happy to meet Members who have regional airports in their constituencies. As I said earlier, this process needs to involve Members of all parties—and it will do.

Paul Beresford: My right hon. Friend will not be surprised to find out that I, too, support everything in his statement. This United Kingdom is open for business, and Heathrow is the doorway. He said he wanted to make Heathrow a better neighbour. The neighbourhood for Heathrow is considerable, and it includes the effect of stacking over areas that affect Gatwick—with a detrimental effect on people in my constituency. Will my right hon. Friend ensure that  when the Civil Aviation Authority looks at airspace, it reflects on the opportunities to make Gatwick a better neighbour as well?

Chris Grayling: The modernisation of UK airspace will hopefully make all airports better neighbours. This is a system that has barely changed for decades, and it is certainly not designed for the current patterns of usage. We very much believe that we need to modernise the use of airspace in a way that reduces stacking, for example. I know, because my constituency adjoins that of my hon. Friend, that stacking certainly affects our area. This modernisation is better for passengers and better for people on the ground; and it will also save fuel and thus reduce carbon emissions.

Gavin Shuker: A majority of Labour MPs and a majority of Conservative MPs support the expansion at Heathrow. Given that this project is likely to span multiple Parliaments, will the right hon. Gentleman take the opportunity to set a good example for both parties and ensure that collective responsibility will apply to any votes in this House?

Chris Grayling: The Prime Minister has been very clear that she does not want to force—indeed, I do not think the public would expect us to force—MPs who have long-standing principles of disagreement over this issue to go against their own views. There are different views on both sides. There are senior figures on the Opposition Front Bench and on the Government Front Bench who disagree with this decision. The hon. Gentleman is right that the majority of Members believe that Heathrow is the right place for expansion. Of course, the whole House will, as part of this statutorily defined process, have to vote and approve the decision. I think we should respect people’s long-standing views and not ask them to go against what they have argued in the past.

Adam Afriyie: This is a devastating decision—for the national economic interest as well as for my constituents, hundreds of whose homes will be bulldozed, and for the millions of people affected by the very loud noise from Heathrow airport. Notwithstanding that—we could rehearse the arguments for ever—if during the consultation period the facts, the economics and the timescale on which the decision has been based, or Heathrow’s commitment to invest in the project, are called into question, will the Government have an open mind about changing their decision?

Chris Grayling: The Government decided very clearly today on their recommendation, which will have to be validated in the statutory process. It must be voted on and confirmed by the House, and that is what will happen. However, we are not entering the process with a view to changing our minds

Sammy Wilson: If the vote took place tomorrow, the Democratic Unionist party would give the Government their support, because we believe that this is good for Northern Ireland. We welcome the Secretary of State’s assurances about extra slots, extra routes, and a place in the procurement process for firms from Northern Ireland. In the meantime, however, will he tell us whether slots that are currently  available for airports in Northern Ireland will be safeguarded at Heathrow, and also whether there are any Barnett consequentials for the Northern Ireland Executive?

Chris Grayling: I hope that the right hon. Member for Belfast North (Mr Dodds) will forgive me: I forgot to answer his earlier question about Barnett consequentials.
This project is funded by the private sector, and there are no Barnett consequentials in a private project. There are Barnett consequentials when we invest in our infrastructure in the public sector, but I fear that there will not be any as a result of spending by Heathrow airport shareholders. As for the question of slots in the meantime, we always want to protect connectivity with Northern Ireland—indeed, we have just done so in the case of the route from Londonderry to Stansted—and we would be extremely concerned if routes to Belfast were in any jeopardy.

Gerald Howarth: I congratulate the Government on grasping this nettle, although I personally believe that the Heathrow hub was a cheaper and less disruptive option, and I am sorry that it was ruled out.
I feel that an opportunity has been lost here. As a party, we believe in competition. Surely it would have been better to agree on extra runway capacity at both Gatwick and Heathrow, which would have settled the matter for a long time henceforth. What is Gatwick’s future following today’s announcement?

Chris Grayling: I pay tribute to the promoters of the Heathrow hub scheme, having already paid tribute to the other promoters generally. The scheme was very innovative and very different, but for two prime reasons we felt unable to endorse it. First, it did not allow respite for the surrounding communities, because the same two corridors would be used for taking off and landing all the time. Secondly, the scheme’s promoters could not ultimately provide the certainty that it would be built and adopted by Heathrow airport, if we opted for it rather than for the main route. Those, to my mind, are two strong reasons. However, I pay tribute again to the promoters. It was a very innovative concept, and we gave it very serious thought. After visiting and listening to the promoters, I considered very carefully whether it was the best option. In the end, however, my judgment was that the north-west runway was the better one for Britain.

Tom Brake: Mr Speaker,
“I hope…the Government will recognise…widespread hostility to Heathrow expansion and say no to a third runway.”
Those are not my words, but the words of our present Prime Minister. Why are the Government disregarding “widespread hostility”, and bulldozing through a third runway which will inflict crippling noise, significant climate change effects, health-damaging pollution and catastrophic congestion on 1 million Londoners?

Chris Grayling: Because we do not believe that it is going to do those things; because we do not believe that it will create the air pollution to which the right hon. Gentleman refers; because we do not believe that it will impose catastrophic congestion—I have already explained  the position relating to public transport access and improved infrastructure around the airport—and, most fundamentally, because we believe that it is in the interests of the United Kingdom.

Oliver Letwin: As my right hon. Friend knows, a decade ago I was among those who were most sceptical about this proposal, but there are times, are there not, when the House must look beyond the immediate issues, on which he touched today, and out to the next 30, 40 or 50 years. In view of the decision that the country has made on Brexit, now is surely the time when we must grab that future and build at Heathrow in order to create a link with the east.

Chris Grayling: I think the message that Britain is open for business is one of the most important messages that we can send to the world. When are we ever going to create this gateway to the future if not now, at a time when we are changing our role in the world? I think we all regret the fact that, notwithstanding our ambitions, it still takes time to do, but we really must get on with  it now.

Clive Efford: The Department’s answers to questions that I tabled asking what protections there were from noise pollution at City airport for constituents such as mine were woefully inadequate. It is clear that once expansion has taken place there will be scant regard for protections for the public, whether from industry or the Government. It is hardly surprising that people roll their eyes when the Secretary of State comes here and tells us that there will be all these environmental protections. In order to convince people that he is in earnest, would he be prepared to make those requirements legally binding, with penalties in place, before any permission is granted for this expansion, so that people can be confident that there will indeed be environmental protections?

Chris Grayling: My view is straightforward. The commitments that are made in relation to compensation for the public and amelioration must form a binding part of the eventual agreements.

Several hon. Members: rose—

John Bercow: Order. I am grateful to the Doorkeeper, who was beetling around the Chamber looking for the wallet of some hapless fellow, poor chap. Geoffrey Clifton-Brown.

Geoffrey Clifton-Brown: I am glad to say that I have not lost my wallet, Mr Speaker.
I warmly welcome the Secretary of State’s announcement, but if Heathrow is to meet its emissions targets a large number of people will have to be persuaded to travel by rail rather than car, so will he say something about the western rail link proposals? Will he also consider providing fast rail links between all London’s airports?

Chris Grayling: Both the western and the southern rail links are part of the schedule for Network Rail’s future projects. Heathrow airport is due to pay part of the cost of those links, since they involve broader issues than this project alone, but as a result of today’s decision their construction will need to be accelerated. Links  between airports are not currently being considered, but if the economy of the south-east continues to grow and develop, they may well be considered in the future.

Rob Marris: I do not share this cosy consensus on airport expansion. Half the population each year does not fly; for environmental reasons, I have not flown for several years. The Secretary of State said today that this expansion would “further reduce…carbon emissions.” What a joke! Because of climate change, the Government should not be in the business of encouraging people to fly and encouraging more air freight, let alone subsidising increased airport capacity and higher total emissions. I urge the Secretary of State and the Government to think again.

Chris Grayling: We take the issue of climate change very seriously, and the Government have introduced a raft of measures to address it, but we must also ensure that we have the prosperity that enables us, for instance, to fund our national health service and our old age pensioners. Having a thriving, modern economy with strong links around the world is an important part of that.

Mark Harper: I was pleased to hear the Scottish National party’s spokesman, the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry), confirm that we are “better together”. I was also pleased to hear the support from the right hon. Member for Belfast North (Mr Dodds) for bringing the four nations of the United Kingdom together.
I strongly welcome my right hon. Friend’s announcement, which is very important to the south-west of England. Will he redouble his efforts to ensure that he holds the promoters to their commitments about regional connectivity, which he said he would do in his statement? Will he also ensure—my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) referred to this—that people in my constituency and elsewhere in the south-west can travel easily to the expanded Heathrow airport, and thence to the world?

Chris Grayling: My hon. Friend is right about the need for a commitment to the south-west of England in particular. I was in the south-west last week. We talk a great deal in the House about transport in the north and transport in the midlands, but I think that we also need to talk about transport in the south-west. There are many projects that are necessary to secure the economic future of the south-west. This project is part of ensuring that there is connectivity with places such as Newquay, and easy access for people such as my right hon. Friend’s constituents. That is why the western rail link must be a good priority for the future.

Andrew Slaughter: The Prime Minister was right when she said that the third runway was a bad idea. She may have caved in to the Heathrow lobby, but will the Secretary of State accept that the level of opposition from councils, mainly Tory-controlled, from local communities, and from Members of Parliament—most notably my right hon. Friend the Member for Hayes and Harlington (John McDonnell)—  means that the chances of the toxic third runway being built are vanishingly small? Will he be sure to keep the Gatwick option open? We are going to need it sooner than he thinks.

Chris Grayling: I know how strongly Members in London feel about this decision, but, having listened to Members today, I have a sense that the balance of view around the country is that we need this connectivity because it is in the interests of the whole United Kingdom. As a Government who believe in delivering an economy that works for everyone, we must operate in the interests of the whole United Kingdom, and that is what we are doing today.

Paul Scully: I welcome the quick decision by the Secretary of State since taking up his position over the summer, but I regret the decision not to include Gatwick at least as one of the options. Will he agree to look again at the Gatwick option as the one that is deliverable in the short term and that is more open for competition, for the benefit of passengers long term?

Chris Grayling: I know that a number of people have said, “Can’t we do both?” I am clear that today we are looking at the Airport Commission report, which set a clear path and said that a new runway would be needed by 2030 and that potentially there would be a need for further capacity by 2050, but only if that could be achieved alongside carbon limits. Therefore, today is about taking the long overdue decision as to how we take that path to 2030, and that is where our focus is.

Catherine McKinnell: As the MP representing Newcastle airport, I know that the airport and the wider north-east business community welcome this decision. It enables both the safeguarding and growth of our connectivity to the UK and the rest of the world. However, given the time it has taken to arrive at this point, may I urge the Secretary of State to have some urgency in getting spades in the ground? When will we see the increased capacity and trading opportunities we vitally need in the wake of Brexit uncertainty?

Chris Grayling: I can save myself and my office a phone call today by telling the hon. Lady I will be visiting her constituency and her airport tomorrow to make precisely the point about the importance of regional connectivity. [Interruption.] No, I probably will not have a spade with me; I do not think Newcastle airport wants me digging it up.
I want this to move ahead as quickly as possible. There is a statutory process we have to follow. There is then a detailed period of design. This has always been something that will be ready for the middle of the next decade. I would love to wave a wand and have it quicker than that, but these things take a long time to design and construct, quite apart from the regulatory process. I know, however, that everybody involved will want to move as quickly as possible.

Stephen Crabb: This is the right decision for Wales, as it is for the whole of the UK. Will my right hon. Friend say a bit more about what specific powers are available to him and whether  he needs to seek further powers to ensure this becomes an outstanding example of British procurement, so that we maximise opportunities for our labour pool, supply chain and, not least, the steel industry?

Chris Grayling: I have been very clear, and this drives to the heart of the debate about costs. I understand the point made by some of the airlines about wanting to ensure that the best possible value is delivered in this project, because ultimately the cost is borne by their passengers. I want to see the maximum possible benefit across the UK. I have extended to the Civil Aviation Authority the power to have a strong supervisory role over this process, not to dictate how the project is designed in detail, but to make sure that there is value at the heart of both the supply chain and the contracting. I want to make sure that this is a value-for-money proposition and that it delivers what we need at a price that is right for passengers.

Wes Streeting: The advent of Crossrail means my constituency on the London-Essex border has enormous potential to capitalise on the benefits for Heathrow, both for passengers and for business and jobs. I therefore welcome the Transport Secretary’s statement. When does he anticipate the third runway being open for business?

Chris Grayling: On the current timetable, in around nine years’ time. I wish it were quicker than that, but it is not. That is the length of time it takes to go through a process such as this—not just the regulatory process, which has been greatly simplified since 2008, but the sheer complexity of design, the acquisition of land, the preparation of sites and the construction not just of a runway, but of the terminal buildings. So this is not a short-term project. I know the decision on the issue has been kicked around for years, but the new Prime Minister and I have wanted to move as quickly as we could. We wanted to take the time over the summer to ensure we really understood the three projects before we decided today. We have done that; we now want to get on with it.

Henry Smith: In the national interest, I welcome the Government’s confirming what the Airport Commission has said is right for this country, and I also welcome my right hon. Friend’s warm words about Gatwick. Can he give assurances that surface access to Gatwick will continue to be enhanced, particularly the rail route, as we go forward?

Chris Grayling: I do not think that any of us could think that the Brighton main line was the priority, for a whole variety of different reasons. We have to deal with the short-term issues and challenges, but we also need to think about how we can best deliver the necessary improvements for the medium and longer term. There is no doubt we need a modernisation programme, but we also need a programme that causes the minimum possible disruption to passengers.

Yvonne Fovargue: Connectivity to Heathrow is essential for areas in Greater Manchester and beyond. However, does the Secretary of State agree that in tandem with expanding Heathrow, new point-to-point routes with emerging economies are essential from other international gateway airports, such as Manchester, and what is he doing to encourage that?

Chris Grayling: To be frank, I am not sure I need to do anything to encourage Manchester airport as it is doing a cracking job already. It had its runway expansion a few years ago and has made good use of it. It is a thriving airport with links around the world. I am hugely impressed by what it has achieved.

Daniel Poulter: I welcome my right hon. Friend’s statement and the benefits it will clearly bring for British business and trade, but he was also right to acknowledge concerns about the environmental impact of the airport expansion and the potential that may have of interfering with our international commitments to reduce carbon emissions. As well as putting in place welcome consultations on electric cars, what other incentives does he envisage to encourage business to comply with these international commitments and reduce carbon emissions?

Chris Grayling: There are three elements to what we are doing. The first is the air quality strategy and the desire to put in place an environment which requires lower emission vehicles in terms of both carbon dioxide and diesel. This is about, first, a regulatory environment in our cities; secondly, incentivising the purchase of low-emission vehicles—something the Government now do extensively with incentives to buy electric vehicles, for example; and thirdly, fiscal incentives to change, which we have already introduced through the car tax system, and on which I have no doubt the Chancellor will be doing more in the future.

Chris Law: Given today’s announcement that the expansion of Heathrow is in the national interest, not just that of the south-east of England, will the Secretary of State commit today to have route connectivity and public service obligation support between Dundee airport and Heathrow?

Chris Grayling: I am not going to pick individual routes today, but I recognise that Dundee is one of the airports that can benefit. The hon. Gentleman will not expect me at this stage to be setting out detailed slot allocation plans, but it is precisely areas like Aberdeen, Inverness and Dundee that can benefit from greater capacity on this route and better connectivity within the United Kingdom.

Oliver Dowden: As the Secretary of State has correctly and repeatedly said, this sends a very clear signal that Britain is open for business, but does he agree that if we are to compete with the likes of China and South Korea we must deliver this rapidly, and what reassurance can he give on minimising any administrative and judicial burdens that may be used to slow down this project?

Chris Grayling: I am not in any doubt that there will be obstacles on the road towards delivering this project, but that will not stop us seeking to move ahead as quickly as we can, and clearly the scheme promoter will want to do so as well, but we are also subject to due process and in a democracy we have to respect that  due process.

Bill Esterson: This is indeed a hugely important project for the whole country, and the Liverpool city region stands to benefit, as other regions do, especially through freight and business travel, so I  welcome the Government’s wholehearted support for the expansion of Heathrow. On the nine-year promise that the Secretary of State has now made, that will be challenging and there must be robust planning and consultation processes, so how will he make sure he gets through that and delivers on the nine-year programme?

Chris Grayling: Essentially, the way it works is that we have this overall process of the national policy statement over the next 12 months, which we will publish in the new year. Now that the recommendation has been made, my officials will prepare that detailed policy statement. It will be published in the new year, and then there will be a statutory period of consultation both outside and in this House, followed by a vote. That effectively seals the big picture stuff for the Planning Inspectorate. There is then the formal process of its submitting its detailed plans and the debate about the minutiae of the application. The Planning Inspectorate does not look at the big decision of whether we should have the runway in the first place; it looks at matters such as the details of the design for consistency with local planning laws.

Michael Fabricant: This statement has been long overdue. Some countries will have developed three entire nuclear power stations and five airports in the amount of time this has taken to be kicked into the long grass by two Labour Prime Ministers and I am afraid a Conservative Prime Minister too, and it is a reflection on this Prime Minister that the decision has finally been made. But why can we not still be talking about expansion at Birmingham International airport and indeed at Gatwick, too?

Chris Grayling: I have no doubt that others will have views about the further expansion of regional airports, including Birmingham. Right now, though, the focus of the Government is on this process, which was after all set up to identify additional capacity in the south-east following a recommendation by an independent commission. This is about delivering what has been recommended to us.

Danny Kinahan: We very much welcome today’s announcement, as have my other colleagues from Northern Ireland, but my party is pushing for expansion at both airports. The chief airlines that fly from Belfast International airport, such as EasyJet and Ryanair, have given a new life to many people in Northern Ireland. Can we not keep the door open to expansion at Gatwick, to ensure that we make the most of that and all the other regional airports, because that will help all of us?

Chris Grayling: As I said earlier, Gatwick will remain an extremely important part of our national transport system, but today’s announcement is all about ensuring that we meet a very real need, as identified by the Airports Commission report. I do not think that this is the moment to start getting into a broader discussion about other airports. Let us concentrate on getting this job done; it has taken much too long to get even to  this point.

Kelly Tolhurst: I welcome the Secretary of State’s announcement today. Now that the decision has been made, can my constituents be assured that the blight to their homes that they have suffered for more than a decade because of the threat of a peninsula or estuary airport is at an end and that those proposals are finally dead?

Chris Grayling: The Airports Commission looked very carefully at the issue of an airport in the Thames estuary and came to the view that that was not a viable option. I too have looked at the issue and I share that view. The Government have no intention of reopening that discussion.

Jonathan Edwards: Transport for London has estimated that the cost of associated transport infrastructure to service a third runway at Heathrow would be about £20 billion. Can the Secretary of State give the House a cast-iron guarantee that any public money used to pay for that work would result in full Barnett consequentials? Or is he saying that the routes identified by TfL would be paid for fully by private sources?

Chris Grayling: It is important to look at the committed outputs. Heathrow airport has committed to an expansion without an increase in the number of motor vehicles using the airport, and to an increase in the number of people accessing the airport by public transport to a level of 55%. That is the objective it has to meet, and it has agreed that it has a financial obligation to get to that point. Some projects are already in train. Crossrail is nearly complete, and the western and southern routes already in Network Rail’s plans will also make a contribution. There is clearly an obligation on the airport to meet those objectives.

Andrew Selous: My right hon. Friend has not said a great deal about the already horrendous congestion on the M25 north and south of Heathrow. Does his Department monitor the extent of the existing traffic jams, which are already really bad? Will anything be done as part of Heathrow’s expansion to try to improve capacity on the M25 so that people can get to and past the airport?

Chris Grayling: As I indicated earlier, the situation around the south-west of the M25 in particular is a matter for concern. Highways England has plans in place to start to address some of those problems. My experience is that the worst jams occur to the south and the north where four lanes go into three, and I have asked Highways England to look at how we can address that issue, starting with the junctions to the south-west.

Sue Hayman: I welcome the Secretary of State’s commitment to developing new connections to the regional airports, but is he aware that it takes at least two and a half hours to get from west Cumbria to our nearest airport? Will he also look at how Carlisle airport could benefit from the expansion at Heathrow?

Chris Grayling: If there are more slots available at Heathrow and there is a market to fly there from Carlisle, there will be an opportunity for the air operators  to do that. As I have said, I am keen to ensure that we protect the capacity of our regional airports, but exactly where and how that happens, and at which airports, will be a matter for the future.

Richard Drax: I congratulate my right hon. Friend on his statement. There is no doubt that this will be in the best interests of the nation and of all our constituents in the south-west, where my seat is. Will he kindly confirm how many direct rail links there will be from the south-west to Heathrow, as that will be absolutely key for my constituents and everyone else in the region?

Chris Grayling: There are two options, depending on which part of the south-west you are coming from. The plan is to have a southern rail link that will join up with the South West Trains network and a western link that will join up with the Great Western network, so my hon. Friend will have a choice. The train paths will obviously be a matter for the train operators at the time, but he will have a choice of routes to follow.

Ian Murray: This is indeed the right decision for the UK and for Scotland, but will the Secretary of State confirm that any additional slot capacity for domestic airlines will be guaranteed either in the planning process or in legislation? Furthermore, will he undertake an ongoing assessment of the ability of regional airports such as Edinburgh to attract direct routes following Heathrow’s third runway coming on stream in nine years’ time?

Chris Grayling: We will look carefully at what the right mechanism should be. It might not be as simple as guaranteeing a number of slots, because I want there to be the right connectivity. For example, I do not want a regional airport to be given a tail-end slot at 11 o’clock at night that does not allow proper links between that airport and international destinations. We have to think carefully about how this should be done and what the best mechanism is for doing it. However, I have given a guarantee that there will be protections for the regional airports and the connectivity that they need.

David Nuttall: I warmly welcome my right hon. Friend’s statement, but with the best will in the world, it will be several years before the new runway comes into use. Will he therefore urge his Friends in the Treasury to allow zero or reduced passenger duty rates on new routes from regional airports such as Manchester, which already have the capacity to expand?

Chris Grayling: All I can say on that is that I have no doubt that my right hon. Friend the Chancellor of the Exchequer will have heard that representation in advance of the autumn statement and the subsequent Budget.

Alan Brown: I welcome the fact that the Heathrow proposals include the potential for a logistics hub at Prestwick airport, and I urge the Secretary of State to involve all the relevant parties to ensure that that happens. May I  also ask him, in relation to strategic thinking, to  consider Prestwick when making the spaceport decision? This would give Prestwick sustainability and a long- term future.

Chris Grayling: I know that the spaceport decision is on its way. I am delighted that the hon. Gentleman thinks the United Kingdom’s choice for the spaceport’s location should be Prestwick. That would cement the bonds that exist between Scotland and the rest of the United Kingdom, showing that we are all part of one United Kingdom.

James Berry: We need more airport capacity but, with respect to the Secretary of State, Heathrow is the worst of the choices available to the Government, particularly for my constituents. Will he confirm that the final decision will be made here in this House and that we will be free to reject Heathrow?

Chris Grayling: First, let me say to my hon. Friend, and to my hon. Friend the Member for Twickenham (Dr Mathias) and others, that I know this is a difficult decision for a number of colleagues to accept. I respect their views and have every sympathy for the pressure that we are putting them under by doing this. My hon. Friend the Member for Kingston and Surbiton (James Berry) is my constituency next-door neighbour and I have worked hard for him in his constituency. I was delighted when he won. All the same, he will understand that the Government have to do what is in the interests of the whole United Kingdom, and these decisions are sometimes difficult for colleagues. The matter will have to be approved by the House, which will have the final say on the national policy statement. If that national policy statement does not secure the approval of the House, this cannot happen.

Jim Shannon: I welcome the Secretary of State’s statement. The Democratic Unionist party was the first political party in the United Kingdom to back Heathrow, and we have always been clear that its expansion would support growth in Northern Ireland and strengthen our Union. More cargo travels from Belfast through Heathrow than from any other UK airport. Will he commit to continuing that vital link in the supply chain between Northern Ireland’s businesses and their clients in every corner of the globe?

Chris Grayling: That is an important part of what this announcement is about, although it is not always at the top of the agenda. Heathrow is the United Kingdom’s biggest freight hub and an important point of connectivity that enables businesses around the UK to ship their products around the world. This is absolutely an important part of the way forward.

Jason McCartney: This is yet another major transport infrastructure investment in the south of England. Will the Secretary of State show similar decisiveness in supporting new long-haul routes from Manchester airport, a new road link for Leeds Bradford airport, the electrification of the trans-Pennine routes, the Manchester and Leeds legs of HS2 and maybe even a new junction 24A on the M62 near Huddersfield?

Chris Grayling: As my hon. Friends who represent seats in the north of the country know, I am very much of the view that we must do a better job for our regions in the north—and, as I said earlier, in the south-west  and the midlands. Having shadowed this job 10 years ago, which involved going around the country and seeing schemes that should have happened, but which were sitting on the drawing board year after year, one of the most pleasurable things that I have found after arriving in my current job is finding so many projects that we have actually done or are doing. More are on the way. I look forward to delivering more improvements to help the constituents of more colleagues in this House.

Tom Pursglove: In reaching the decision, what weight did Ministers give to the benefit for UK supply chains? People in Corby, for example, will be pleased with Heathrow’s commitment to use British steel because that will be good for jobs in our steel towns.

Chris Grayling: I was pleased by that undertaking. Heathrow will inevitably want to use a diverse supply chain within the UK. We will do everything that we can to encourage that, and I hope that Corby will be one of the beneficiaries.

Desmond Swayne: My hon. Friend the Member for Richmond Park (Zac Goldsmith) warned us that court decisions will prevent a decision taken by this House from being implemented. Has my right hon. Friend considered any legislative remedy to stop that, notwithstanding the fact that he has already told us that this is, after all, a democracy?

Chris Grayling: From what I have read in the newspapers, I suspect that there may be attempts to challenge the decision. However, such court cases usually hang on whether we have given a decision careful consideration. We have looked at the matter exhaustively and considered all the issues. We understand the challenges and the hurdles that we have to overcome. This is a rational, measured, thought-out decision about what is in our country’s best interests. Our elected Government are there to take such decisions and I hope that the courts will not seek to challenge that.

Rehman Chishti: I welcome the Secretary of State’s statement. It showed respect for the work of the independent Davies commission, which had already rejected the bizarre, pie-in-the-sky idea of an estuary airport due to delivery, structural and environmental concerns. I thank the Secretary of State for making the right decision on the basis of the evidence and in the national interest.

Chris Grayling: I am grateful to my hon. Friend for his comments. The commission did a first-rate job of looking at all possible options, including the concept of an estuary airport. It came out with a clear view in the end. Sir Howard Davies recently emphasised his strong commitment to his commission’s recommendation. When Governments set up independent commissions and ask them to make recommendations, they should listen carefully; that is what we have done.

Thomas Tugendhat: I welcome my right hon. Friend’s announcement, but will he assure the people of west Kent, in particular the residents of Edenbridge, Penshurst and Tonbridge, that a decision regarding Gatwick will not come up in the next few years and continue to blight their lives? Will he also say a little more about the six-and-a-half hours’ relief that he is quite rightly offering to people near Heathrow? Could that ban on night flights, from which we suffer all the time, be extended to Gatwick?

Chris Grayling: I am very aware of the issues around Gatwick, including the concern about noise, which is very much on my desk. I have talked to the CAA about how best to find the right balance for residents in areas under Gatwick’s take-off and landing routes. Today’s announcement is about the decision to add new runway capacity. The Airports Commission’s view was that we needed one new runway in the south-east by 2030. That is what the Government have sought to implement.

Kevin Foster: I congratulate the Secretary of State on finally making a decision, which will be great news for Torbay businesses that export their seafood via Heathrow. Does he agree that the decision now makes even more urgent the resolution of another long-standing question: the dualling of the A303 and the riddle of Stonehenge?

Chris Grayling: Yes. The planning work for the A303 is now well under way.

Julian Sturdy: For a hub airport to benefit the whole country, regional airports such as Leeds Bradford need increased access—more than the status quo. While I welcome the statement, may I push the Secretary of State on how many more slots will be available to regional airports? I also emphasise that landing charges must not work against internal flights.

Chris Grayling: I am keen to ensure that we do not see a big uplift in landing charges as a result of the project. I have been clear that the project must be brought through affordably and delivered in a way that represents best value for everyone involved. As for connectivity, I am not in a position to start setting out details about numbers of slots or exact mechanisms. I simply commit to the House that those things will be a binding part of what we eventually conclude.

Stuart Andrew: I, too, welcome the commitment about regional connectivity, not least because flights between Leeds Bradford and Heathrow have become increasingly popular. It is also important that passengers are able to get to Leeds Bradford airport. Will the Secretary of State meet me to explore how to make progress on the campaign for a rail link up to the airport, which would account for only a teeny-weeny amount of the money being spent on Crossrail?

Chris Grayling: I am happy to have that conversation with my hon. Friend.

National Health Service Provision (Local Consultation)

Motion for leave to bring in a Bill (Standing Order No. 23)

John Bercow: It is a great pleasure to be able to move on to the ten-minute rule motion. Without wishing to embarrass the hon. Member for Banbury, she must find it encouraging to have paternal support so nearby.

Victoria Prentis: I do find it encouraging to have paternal, maternal and, indeed, filial support in this place, Mr Speaker.
I beg to move,
That leave be given for to bring in a bill to make provision about mandatory local consultation in relation to changes in services proposed by NHS Trusts and healthcare commissioning authorities; and for connected purposes.
The Bill is the result of our experience in Oxfordshire this summer when the Oxford University Hospitals NHS Foundation Trust suspended consultant-led maternity services at our local general hospital with no warning and no consultation. Horton general hospital was a gift to the people of Banbury in 1872. It serves a community of some 150,000 people, although that number grows day by day as more houses are built. Horton general’s patients are spread across six parliamentary constituencies that cover a large rural hinterland and some of the most deprived areas in Oxfordshire.I was born at the Horton and four generations of my family have been treated there.Like my constituents, I amproud of my local hospital and feel passionately about keeping its acute services.
Our unit was fairly small by national standards, with about 1,500 births a year. It was well regarded, both medically and by the families who chose it, but despite that fine reputation, it has been under threat for as long as I can remember. The first speech I made in primary school was about saving maternity at the Horton. The last major threat we faced was in 2008when my predecessor, the former Prime Minister, the former Member for Daventry and the passionate “Keep the Horton General” group all fought tooth and nail to save the hospital.
At that time, the matter was referred to the independent reconfiguration panel, which looked at the evidence in considerable detail and concluded that
“there are major concerns over whether such a large unit as that being proposed”—
at the John Radcliffe hospital—
“would be (a) safe and (b) sustainable…There are sufficient concerns around ambulance provision and the transfer of very sick babies and mothers from Banbury to Oxford to call into question the safety of what is being proposed by the Trust.”
After that, we thought that the fight would be over for a considerable time. How wrong we were. On 20 July, I was invited to what seemed to be a routine meeting with the trust, so I asked a member of staff to go. No other Members of Parliament were asked to attend—nor could they have done, of course, on a sitting Wednesday. I was horrified to hear that the trust had failed to recruit sufficient obstetricians and that, as a result, the Horton would be downgraded as an emergency and there would be no consultation.
On 31 August the trust board approved the downgrading. Three weeks ago, obstetricians left and we became a midwife-led unit.Colleagues know that I am, with good reason, passionate about both maternal and perinatal safety.Nevertheless, I accept that MLUs are the best place to be for most deliveries, particularly as most are located alongside or very near an obstetric unit. That is the nub of our problem: if an emergency arises, or a woman simply changes her mind about having an epidural, our labouring mothers will have to be transferred by ambulance to Oxford, which is about 23 miles away. The average time for that journey door to door in a blue-light ambulance will be between 30 and 45 minutes. The traffic is dreadful and unpredictable; many of my constituents, myself included, go to enormous lengths to avoid driving into Oxford. National Institute for Health and Care Excellence guidelines make it clear that when an emergency C-section is needed, that must happen within 30 minutes. Once the transfer time is factored in, along with how long it takes to move a labouring mother into and out of an ambulance, that will be quite impossible from the Horton. The worry, of course, is that some will not make it in time.
Clearly, most women will no longer be permitted to deliver in Banbury. In the past three weeks there have been 12 births, whereas ordinarily there would have been about 90. Many of the women who will now deliver in Oxford live up to an hour and a half’s drive from the John Radcliffe. I worry about these women, about the babies that will be born at the side of the road, and about everyone’s experience of labour. I can barely begin to imagine the situation facing women who do not own a car, as the journey to Oxford from many of the villages by public transport is almost impossible.
I have repeatedly asked the trust to show me risk assessments, but have been sent nothing. My office eventually tracked down some risk assessments online that set out an alarming number of “high risk” factors, including transfer time, ambulance provision and the John Radcliffe’s ability to cope with the additional births. I asked for an explanation and have received nothing. Without evidence, I struggle to accept that patient safety has been fully assessed, and the unit should have been staffed by locums and professionals from the trust’s other sites while that was done thoroughly. I must also question how this all became an emergency, given that I have since been told that the clinical research fellows programme had become increasingly unsustainable over the past 18 months. Serious concerns have been raised about whether sufficient and timely efforts were made to recruit. As a new MP, when meeting the new chief executive, I would have expected this problem to have been flagged up. I would have welcomed the chance to try to help to solve the problem, as my constituents are now doing by offering discounted housing, school fees and even free Hook Norton beer to those who apply to be obstetricians.
My constituents are fearful and angry. We have had a summer of protests. Many local consultants and GPs are against the suspension and have complained furiously that such an important decision was taken over six weeks during the school holidays. I have considerable sympathy for those who believe this is part of a wider conspiracy to downgrade our local hospital. For many years, a vociferous contingent at the trust has wanted to centralise services in Oxford and to use our site for  more out-patient services. One of the options proposed in the forthcoming sustainability and transformation plan is for exactly that, with the Horton’s maternity services becoming midwife-led. We fear that the situation this summer has been engineered to make that a fait accompli.
I was a civil servant for 17 years and, on the whole, I like to believe the best of our public servants, but I feel let down by the way we have been treated this summer, and by the lack of good management, transparency or evidence-based decision making. I am concerned that without a change to the law, other areas may also suffer as we have. The trust holds all the cards, as only it has the ability to manipulate the number of births each centre receives. We have no control over recruitment. Only the trust has the power to make posts attractive, and it has all the evidence and carries out all the risk assessments. The clinical commissioning group has been notable by its silence.
The Bill would increase the accountability of local trusts and commissioning authorities. When major changes to service provision are proposed, clinical groups and medical consortiums are not a replacement for public consultation. Doctor may know best, but only when he has listened to the patient. Local decision making can work, but only with democratic accountability. We in north Oxfordshire and the surrounding area remain hopeful that our unit will reopen next March, when sufficient obstetricians have been recruited. In the meantime, we fear for the safety of our mothers and babies.
Question put and agreed to.
Ordered,
That Victoria Prentis, David Mackintosh, Alex Chalk, Nigel Huddleston, Antoinette Sandbach, Will Quince, Marie Rimmer, Heidi Allen, Maria Caulfield, Harriet Harman, Robert Courts and Mr David Hanson present the Bill.
Victoria Prentis accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 27 January, and to be printed (Bill 80).

CRIMINAL FINANCES BILL

Second Reading

Ben Wallace: I beg to move, That the Bill be now read a Second time.
First, may I, through you, Madam Deputy Speaker, apologise to the House on behalf of my right hon. Friend the Home Secretary, as she is unavoidably detained on departmental business pertaining to national security and has therefore asked me to open this debate?
Both terrorism and serious and organised crime pose a real and present threat to the UK. Those involved in terrorist activities endanger our domestic security and overseas interests. Terrorism may be the greatest threat we face, but serious criminality arguably causes the greatest harm, costing the UK at least £24 billion annually, causing loss of life, and depriving people of their security and prosperity. Right hon. and hon. Members must not doubt the scale of this problem, as it damages our economy and our communities. It also has impacts on real people, whether we are talking about a grandparent being scammed out of their life savings; the trade of weapons that enable the type of marauding firearms attacks we have seen in Paris; the smuggling of illegal drugs that blight our high streets and local neighbourhoods; or the organised trafficking of young women and children.
Those crimes have a corrosive impact on the most vulnerable in society—they ruin the lives of real people—but this is part of a truly global issue. As David Cameron has said, international corruption is
“one of the greatest enemies of progress in our time”
and the
“cancer at the heart of so many of the world’s problems”.
Financial profit is at the heart of almost all forms of serious and organised crime. The UK drugs trade alone is estimated to generate £4 billion of revenue, and Her Majesty’s Revenue and Customs estimates that more than £10 billion was lost to tax evasion and criminal attacks against the tax system in 2014-15 alone.

Gavin Robinson: I agree entirely with that comment from the former Prime Minister and with the thrust of the Bill. One great concern of Christian Aid is that the Bill does not extend to or legislate for the Crown dependencies or overseas territories. Will the Minister respond to that at this early stage?

Ben Wallace: I thank the hon. Gentleman for that point. The Bill does extend some of the offences and powers it contains to cover an extra-territorial extent, which will go a considerable way to getting to the bottom of money laundering, whether that be carried out here or elsewhere around the world. It also goes some way to dealing with people who evade tax overseas. Just because they are not evading our tax but are robbing another country, it does not mean that we would not still like to take action against those individuals. The Bill goes some way on that.

Several hon. Members: rose—

Ben Wallace: I will make some progress and Members will doubtless be able to make their points throughout the debate.
Many of the criminals who profit from such activities live in plain sight, untouched by law enforcement agencies. They reap the benefits by money laundering—moving, hiding and using the proceeds of their crimes to fund their lifestyles and enable further criminality. It is estimated that the annual amount of money laundered globally amounts to $1.6 trillion, while the National Crime Agency assesses that many billions of pounds are laundered into or through the UK as a result of international corruption.
We should be rightly proud of the UK’s status as a global financial centre. This is one of the best places in the world in which to do business, but we must recognise that the size of our financial sector and open economy and the attractiveness of the London property market to overseas investors make this country unusually exposed to the risks of international money laundering. That is why this Government are taking action—to combat money laundering, terrorist finance and corruption—here and overseas. We are sending a clear message that we will not stand for money laundering or the funding of terrorism through the UK.

Margaret Hodge: I am extremely grateful to the Minister for giving way. I agree with the content of his remarks, but I wish to pursue further the issue that has been raised by the hon. Member for Belfast East (Gavin Robinson). Does the Minister agree that transparency is absolutely key to trying to tackle some of the corruption and money laundering that take place? If he does agree, why is he not using this Bill to ensure that the overseas territories and Crown dependencies, which come under our jurisdiction, publish publicly available registers of beneficial ownership?

Ben Wallace: Yes, I absolutely agree that transparency is one of the steps along the path of tackling both corruption and money laundering. That is why, at the anti-corruption summit in May, the Prime Minister basically reaffirmed that commitment. Even before that, we had worked with the overseas territories and Crown dependencies to ensure that, hopefully by the end of this year or into next year, there will be transparency, registers, of which a considerable number will be public, and automatic information exchange between our tax authorities and those of our dependencies. In that way, we will be able to have access to information about people hiding tax from us, and our law enforcement agencies will then be able to set about tackling the matter.
This Bill is part of that process. A key element of that approach will be ensuring that we work with the private sector to make the UK a more hostile place for those seeking to move, hide or use the proceeds of crime.

Liz Saville-Roberts: Prosecuting corporations for failing to prevent economic crimes was expected to be a core part of this legislation as it appeared during the consultation phase. It seems that, despite Government indications that they would include provisions to hold to account corporations that let their staff facilitate tax evasion and other economic   crimes, those provisions are not part of the Bill. Will the Minister explain why he has chosen not to include such eminently sensible precautions?

Ben Wallace: Yes, but I will come to that part of the Bill later on. It is certainly our intention to prosecute those corporations, or the corporate body, that allow their companies to facilitate tax evasion. Under the current system, an individual can be prosecuted for evading tax, and someone within a company can be prosecuted if they facilitate that evasion. At the moment, it is very, very hard to prosecute the corporate body. We are intending to make that change in our Bill. If the hon. Lady reads the Bill, she will see how we will do that. We will go after not only the corporate body here in the UK, but overseas companies. Being an overseas company will not be an excuse, and we will go after them in the same extra-territorial way that we do with the Bribery Act 2010.

Keith Vaz: I congratulate the Minister on his appointment to the Home Office.
In evidence to Parliament earlier this year, the private sector made it very clear that it is trying to co-operate with the Government. There were 381,000 suspicious activity reports made under the ELMER system, only 20,000 of which could be looked into. What support is he giving the National Crime Agency to allow it to have a better system to deal with those reports?

Ben Wallace: I am grateful to the right hon. Gentleman for his intervention and for his kind comments about my appointment.
First, we will remove those barriers to information sharing. Often some of the regulators or the bodies that we deal with say that they would like to pass on more to us, but feel that they are not protected from sharing wider information. We will remove those barriers so that the National Crime Agency can see the full chain of a financial instruction. We will also empower the NCA with a stronger disclosure order so that it can force people—it can go and apply for an order—to release documentation or to comply with questions about a particular transaction. Such an order currently exists in the Proceeds of Crime Act 2002, but it only covers fraud. We will now do the same for money laundering. We will also extend the time limit for a suspicious activity report. At the moment, there is a one-off extension of up to 31 days, but we would like to see that extended to six months, which means that the NCA will have much longer for its investigations.

Keith Vaz: I thank the Minister for his very full answer, but the real problem is that the system is old. The ELMER system needs to be replaced and renewed. Will he give the National Crime Agency the additional resources to pay for the new system to do all the things that he is suggesting? Without a new system, 20,000 simply does not go into 381,000.

Ben Wallace: The right hon. Gentleman is absolutely right that 381,000 referrals is a hefty amount to get through. First, we need to ensure that there is time to get through them. Secondly, what we do not want is what has happened in the past, which is that the private sector makes a suspicious activity report by default.  If we can remove those excuses about why it cannot get to the bottom of a transaction before it passes it on, that will ensure that it passes on proper suspicious activities, rather than the ones that it can satisfy itself are not such a problem. In that way, we can cut out some of the referrals that are unnecessarily done.

Alistair Carmichael: I thank the Minister for giving way. He is being exceptionally generous.
Does that example not actually illustrate exactly what prosecutors are up against here and the complexity of these cases? Compulsion for transparency will be necessary, as it will put prosecutors on the front foot. Will he look at this matter again—it has already been raised by a number of Members—as the Bill progresses?

Ben Wallace: Yes, I can assure the right hon. Gentleman that that will happen throughout the passage of the Bill and even after. This is part of a longer process. We will make sure that, where we cannot get hold of the information that we need, we will prosecute people who are deliberately trying to evade tax, and also prosecute people who are trying to launder money. That is part of the process. Many of these powers, including the unexplained wealth orders, give us the benefit of the doubt and put it on to us to say, “Actually, we think you’re linked to serious organised crime, or we can show you are. Explain to us where your money is from.” At the very least, that will get over some of those hurdles about not being able to get to the bottom of the information in that process. That is one of the steps that we will take and that I hope the right hon. Gentleman will support as the Bill goes through.

Charlie Elphicke: I welcome my hon. Friend to his place as Security Minister. His appointment is much deserved.
May I ask him about seizure and forfeiture powers? Previous legislation in this area has not been entirely successful in ensuring that the assets of criminals are seized. Can the Minister explain to the House why the provisions in this Bill will make a difference? We want to ensure that we grab the money off the criminals so that they cannot carry on with their illegal enterprises.

Ben Wallace: My hon. Friend is right that, in the past, it has been a challenge. Crafty hoods have been very good at taking their money out of cash and putting it into a range of moveable valuables, such as fast cars, paintings, jewels, or even betting slips, which I know the Scottish Government are quite keen for us to consider. We need to broaden it out and ensure that when they are crafty, we are crafty as well.
This Government have already done more than any other to tackle money laundering and terrorist financing. More assets have been recovered from criminals than ever before, with a record £255 million recovered in 2015-16, and hundreds of millions of pounds more frozen and put beyond the reach of criminals. We set up the Panama papers taskforce to ensure an effective, joined-up approach to those revelations. The London anti-corruption summit in May built capacity with  overseas partners.
It is important to note that we are already doing this. In November 2015, the UK returned £28 million to Macau, which were the proceeds of corruption laundered in the UK. That is a concrete example of our giving back money to those countries that have been robbed by crooks who have used Britain to launder the money or to make the money in its jurisdiction. I want to see more of that and to see it go further.
There was a need for legislation and a need to build on the process of the anti-corruption summit and to find out where we were still vulnerable. In October 2015, the Government published the “National risk assessment for money laundering and terrorist financing”, identifying a number of areas where these regimes could be strengthened. Our response to that assessment was the action plan for anti-money laundering and counter-terrorist finance, which was published in April 2016. It represents one of the most significant changes to our anti-money laundering and terrorist finance regime in more than a decade.
The Bill will give effect to key elements of that action plan. It will significantly enhance the capability of UK law enforcement to tackle money laundering and to recover the proceeds of crime. It will strengthen the relationship between public and private sectors and combat the financing of terrorism.
Part 1 contains a number of measures that will amend the Proceeds of Crime Act 2002, including the creation of unexplained wealth orders. There are criminals who declare themselves almost penniless, yet control millions of pounds. Law enforcement agencies may suspect that assets are the proceeds of international corruption, but they are unable to freeze or recover them, often because they cannot rely on full co-operation with other jurisdictions to obtain evidence. A court will be able to make an unexplained wealth order to require an individual or organisation suspected of association with serious criminality to explain the origin of assets, where they appear to be disproportionate to their known income. If that person does not respond, this may enable the property to be recovered under existing civil recovery powers.
Part 1 chapter 1 will extend the use of disclosure orders, which allow a law enforcement officer to require someone who has relevant information to answer questions as part of an investigation. Those orders are already in use for civil recovery and confiscation investigations. They will now be available for money laundering cases.
Chapter 2 will enhance the process by which private sector companies report suspected money laundering—the suspicious activity reports, or SARs, regime. Where a company in the regulated sector, such as a bank, accountancy or legal firm, suspects that it may commit a money laundering offence, it is obliged to submit a SAR to the National Crime Agency, seeking consent to proceed. At present, there are occasions where these SARs are incomplete and where further information is needed to inform the NCA’s decision. The Bill will give law enforcement agencies more time to investigate those suspicious transactions that require consent and the NCA extra powers to request further information from companies to help to pursue those investigations and conduct wider analysis.
The Bill will provide a gateway for the sharing of information between regulated companies—subject to appropriate oversight—to help to build a broader  intelligence picture of suspected money laundering. This has been piloted through a programme known as the joint money laundering intelligence taskforce. In the 12 months from February 2015, the taskforce led directly to 11 arrests, the restraint of more than £500,000 and the identification of 1,700 bank accounts linked to suspected criminal activity. We want to build on the success of that work, by providing the clearest possible legal certainty that companies can share information for the purposes of preventing and detecting serious crime.
Part 1 chapter 3 will improve the ability of law enforcement agencies to recover the proceeds of crime. Existing legislation contains civil powers to confiscate cash, but criminals hold proceeds in other forms, as I said earlier, and we must adapt. The types of asset covered by the power are listed in the Bill, so that Parliament can properly scrutinise its potential use. We continue to consult operational partners on their requirements, and I expect that we will introduce a Government amendment to extend the list to include gambling slips and tokens, which are often used by organised criminals to launder their ill-gotten cash. I hope that such an amendment will attract cross-party support.
The rest of part 1 will extend existing POCA powers to a number of other organisations, including the Serious Fraud Office, Her Majesty’s Revenue and Customs and the Financial Conduct Authority. It will make a range of minor and technical amendments to POCA.
The first duty of any Government is to keep their citizens safe. The terrorist threat is real and is growing. If we are to combat that threat, we must cut off the funding streams that enable terrorist-related activity. The 2015 national risk assessment identified two key weaknesses in this area: the raising and moving of terrorist funds through vulnerabilities in the financial sector, including money service businesses and cash couriering; and the abuse of the charitable sector for terrorist purposes. To combat these issues, part 2 will make complementary changes to powers for terrorist finance cases, by mirroring many of the provisions in the Bill, such as those on SARs, disclosure orders and seizure and confiscation powers, so that they are also available for investigations into offences under the Terrorism Act 2000.
Part 3 will deliver on the Conservative manifesto commitment to make
“it a crime if companies fail to put in place measures to stop economic crime, such as tax evasion”.
At present, if an individual evades tax and that is criminally facilitated by those working for a company, the individual taxpayer will have committed a crime and those individuals facilitating it could also be prosecuted, but it is very difficult and often impossible to hold the corporate entity to account. That needs to change. That is why we are creating two new offences of corporate failure to prevent the criminal facilitation of tax evasion—one in relation to UK taxes; another in relation to taxes owed to other countries.
Tax evasion is wrong. It is a crime. It cannot be right that a business operating in the UK can escape criminal liability simply because a tax loss is suffered by another country rather than the UK. The new offence in relation to foreign taxes will be of particular benefit in tackling corporate facilitation of corruption in developing countries.  HMRC has conducted two public consultations on these offences, including engagement with the private sector—banks, accountants and legal practices—and everyone is clear of the need to take responsibility for ensuring the highest possible standards of compliance in this area.
As I have said, tax evasion and corruption in the developing world are key contributors to global poverty. Those crimes are frequently facilitated by companies in other jurisdictions. We cannot abdicate our responsibility and leave solving this problem to other countries. The UK’s financial sector should lead on the disruption of tax evasion, money laundering and corruption. This measure will help to do just that.
The Government are committed to reducing the regulatory burden on business, which can make it harder for companies to focus on real risks. The measures in the Bill were developed in close partnership with law enforcement agencies and the regulated sector, including major financial institutions, as well as other key representatives.

Robert Jenrick: Although I support the Bill, does the Minister agree that there is no point in legislating if the agencies tasked with enforcing the legislation simply do not have the resources to do so? For example, since the creation of the Office of Financial Sanctions Implementation, as far as I am aware from talking to lawyers who work on white-collar crime practices, there has been no enforcement whatever. All of us who want to support the Bill would like to hear reassurance that there will be the resources to match the good intent.

Ben Wallace: I am grateful to my hon. Friend for his intervention. In the past few months, I have visited regional organised crime units up and down the country, including in his region, and the NCA, and they all say that their barrier to getting further with some of these problems is not the resource issue; they all say that their barrier has been the ability to find the cash, see the cash and seize it. Those three things are incredibly important. We can put all the resources in the world into our law enforcement agencies, but if they do not have the powers to take back some of the stolen assets, it will not make a difference.
The thing that struck me coming into this job only a few months ago, although I thought I knew a bit about terrorism from my previous life, and what has absolutely shocked me is the weight and strength of organised crime across the United Kingdom. To see its depth, how it affects my community in the north-west and how close it comes to us all really takes my breath away. I am absolutely determined not only that the guys and girls at the top, the Mr Bigs, get sent to jail for as long as possible, but that those people who consider themselves a little removed from it—the facilitators, the white-collar smoothies who launder the money into property and so on—also face their time in court, because they are the people who contribute to the message that there is a permissive society and that it is okay to be associated with crime. They are the people who help the nasties to put a gloss on themselves.
That is what I am determined to do with the Bill. All Members should rest assured that I will use the Bill to try to build momentum in non-legislative areas—in the  non-regulated sector. I want to ask the regulators of estate agents and accountants what they are doing to play their part. If we can change the powers here, if their members get into trouble, what are they going to do to hold their members to account? Legislation is only one part of this. I hope that everyone supports the Bill and that the message goes out that there is more to do and that we will make sure that those people who facilitate and think that they live on the edge of the crime know that we are coming after them.

Charlie Elphicke: I thank my hon. Friend for giving way again; he is being incredibly generous. As he says, this is a question not just of laws but of the culture of the organisations. The NCA’s predecessor organisations all seemed to be more culturally bureaucratic. The NCA seems to be more intelligence-led. It seems to have more officials at the top who were intelligence operators in past times. From everything that I have seen, the NCA is far more vigorous at chasing down the intelligence, which is what it really needs to do.

Ben Wallace: There are several parts to this. The NCA has absolutely got the bit between its teeth, and I see a professional organisation up and down the country determined to tackle the threat that we face. I compliment police forces throughout the country that have put away the old-fashioned territorial boundaries that organised crime often exploited and have been determined to work together. When we visit Police Scotland and regional organised crime units in the north-west and all the other regions, we see police forces all sitting around the same table, working together for their own ends, led by intelligence, deciding on their priorities, sharing capabilities and knuckling down and getting on with it, rather than just focusing on their small areas. The NCA and regional organised crime units have provided the impetus on this, and the results will speak for themselves. I can assure the House that each of the Bill’s provisions will be subject to a set of stringent safeguards and robust oversight, so that they can be used only where it is necessary and proportionate to do so.
We considered carefully the responses to the public consultation on options for legislative proposals to implement the action plan. We published the Government response alongside the Bill earlier this month. I am grateful to everyone who responded to that consultation. There will inevitably be some additional pieces of statutory guidance to underpin the measures in the Bill. We will seek, wherever possible, to make that available to Parliament during the passage of the Bill, to ensure the widest possible consultation on how it will work in practice.
The Bill is only one part of a wider package of measures, as I have said, aimed at strengthening the Government’s response to money laundering and increasing the amount of criminal assets confiscated by the state. Our wider programme includes improving the effectiveness of the supervisory regime for the regulated sector; reforming the SARs regime, including investment in systems and processes; and further increasing our international reach, working with other Governments, overseas territories, Crown dependencies and international organisations to crack down on money laundering, tax evasion and corruption. We must ensure that the Bill and those  other projects have the greatest possible impact on money laundering and terrorist finance in this country and abroad.
I welcome the hon. Member for Hackney North and Stoke Newington (Ms Abbott) to her post as shadow Home Secretary, and I am pleased that she has been able to meet me since her appointment to discuss this Bill. I would be delighted to continue to meet her and her team during the passage of the Bill to make sure that we get it right. Hopefully, we can work to ensure that the whole House agrees to support the Bill to send a message to the crooks, criminals and facilitators that we will not tolerate this any more. I hope that the hon. Lady, her colleagues and Members from the Scottish National party agree that it is in the public interest that the Bill be enacted at the earliest opportunity, hopefully with clear cross-party support.
I also congratulate the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper) on her recent election as Chair of the Select Committee on Home Affairs. I am afraid that she is not in the Chamber, but she has a wealth of experience in home affairs, and I look forward to discussing these issues with her and the Select Committee.
The Government are committed to protecting the security and prosperity of our citizens, and the integrity of our world-leading financial system. We must ensure that we can pursue vigorously those who abuse that for illicit means. That is what the Bill will do, and I commend it to the House.

Diane Abbott: If someone walks around the most expensive neighbourhoods of London—Knightsbridge and South Kensington—they will see house after house dark every night. Some have no lights on because the owners  are out, but many more have no lights on because they have been bought as an investment and lie empty most of the time. Some of the most expensive properties in the capital are unoccupied because they have been bought solely for the purpose of laundering dirty money.
In 2016, money laundering is not just happening in accountancy offices or the back rooms of banks. It is happening in plain sight of ordinary Londoners, because we see some of the most expensive domestic properties in the world change hands but remain mysteriously and persistently empty. We welcome the Bill, which has been introduced with the express purpose of providing new powers and safeguards to improve the Government’s capacity to tackle money laundering and terrorist financing and, above all, to recover the proceeds of crime. I want to make it clear that, in principle, the Opposition support the aims of the Bill.
We do so because it is vital to do as much as we can to bear down on illegal activity, including targeting the enablers of illegal activity: lawyers, accountants and estate agents. We support the Bill partly because public opinion, encouraged by the work of the Public Accounts Committee under distinguished past and present leadership, rightly demands that politicians do more to stop tax evasion. We also do so because some of the poorest countries in the world have had their Treasuries denuded by money laundering. If the UK, which is often described as one of the money-laundering centres of the world, could act effectively against money laundering, not just  our own tax authorities but the populations of countries in the global south, from which some of this money has been looted, would benefit.
We will wish, however, to ascertain that the provisions of the Bill will actually work and impact in reality on the harms that the Minister set out. We will weigh carefully the civil liberties implications of those provisions. Furthermore, we seek assurances that the Government agencies tasked with implementing the legislation will have all the resources and support that they need.

Keith Vaz: The issue of resources was raised by the hon. Member for Newark (Robert Jenrick). Despite the effective way in which the Minister made his case, he did not answer my question. When will the NCA get a new computer system? When will ELMER be renewed so that the agency can look through SARs? The system is designed for 20,000 complaints, but it is currently dealing 385,000. The agency needs a new computer system to do what the Minister and my hon. Friend the Member for Hackney North and Stoke Newington (Ms Abbott) want the Bill to achieve.

Diane Abbott: I am grateful to my right hon. Friend for that important intervention. If the Minister does not give a clear reply to that question on the Floor of the House, I can assure him that we will pursue the issue in Committee.
The Minister said that money is not the main obstacle to pursuing money launderers and criminal actors, but it does not help when agencies such as the NCA experience cuts. The Home Affairs Committee produced an important report in June on the proceeds of crime, and I am indebted to the then Chair and the Committee as a whole for their investigatory work. The Committee pointed out that money laundering takes many complicated forms, ranging from complex financial vehicles and activity in tax havens around the world to property investments in London and high-value jewellery. I share the Select Committee’s astonishment that of over 1 million property transactions last year only 335 were deemed suspicious. I agree with the Select Committee’s conclusion that supervision of the property market has been “totally inadequate” and has
“laid out a welcome mat for launderers”.
The Select Committee report also made the important point that it is all too easy for people who want to launder money to buy property in London, let it out in the capital’s high-value lettings market, then take in clean money in perpetuity.
Overall, the NCA believes that up to £100 billion of criminal funds could be passing through the UK each year in the form of property, luxury cars, art and jewellery. Transparency International estimates that there are hundreds of properties in the UK that are strongly suspected to have been acquired with the proceeds of corruption. Land Registry figures show that UK real estate worth more than £170 billion is held by more than 30,000 tax haven companies. I do not argue that there can never be a legitimate reason for holding UK real estate in a tax haven company, but I believe that, all too often, what we see could well be illicit activity.

Charlie Elphicke: As a former tax lawyer, may I point out to the hon. Lady that companies in tax havens own UK property because it was possible to do a stamp duty  avoidance scheme called “enveloping” during most of the period in which the Labour Government were in office? Action taken by this Government has put a stop to a lot of that abuse.

Diane Abbott: I made a point of saying that there can be legitimates reasons for holding UK property in tax haven companies. I remind the hon. Gentleman that it was not every single detail of the activity of the last Labour Government that I supported.
Most owners of those companies hide behind anonymous trusts or nominee directors and shareholders. For instance, in a single 50-storey apartment complex in London, The Tower at St George Wharf in Vauxhall, a stone’s-throw from the House, a quarter of the flats are held through offshore companies. This Bill aims to close a loophole which means that authorities cannot seize property from overseas criminals unless the individuals are first convicted in their country of origin. The orders will apply to property and other assets worth more than £100,000. If the owner fails to demonstrate that a home or piece of jewellery was acquired using legal sources of income, agencies will be able to seize it.
The Opposition support the new law in principle, but stress that for it to be effective agencies must be given the financial and political support to take powerful and wealthy individuals to court. Furthermore, there is some concern, which we will explore in Committee, that the measures may be too widely drawn. Throughout, the sole safeguard for seizure orders is the reasonable suspicion of a police officer on their own authority. This may be too low a bar as a safeguard against the incompetent use or abuse of state powers.

Keith Vaz: I thank my hon. Friend for her kind comments about the Select Committee’s report published in July. In evidence to the Committee, Sir Bernard Hogan-Howe suggested that the criminal law should be amended to ensure that those who had not paid their compensation order should be the subject of a second criminal offence. Does my hon. Friend agree that it is wrong for those who are subject to a compensation order to go to prison, finish their sentence and come out without it being paid? We need to look very carefully at this aspect.

Diane Abbott: My right hon. Friend is right. We need to look at the case of people who serve a prison term that may be relatively short, but are able, in effect, to flout the compensation order.

Edward Garnier: I take the point that my neighbour, the right hon. Member for Leicester East (Keith Vaz), makes, but often when a criminal is sentenced, along with a compensation order or a proceeds of crime order, he is sentenced to an additional term of imprisonment in the event that he does not pay back the money. Sometimes those extended sentences can be very long—indeed, as long as or even longer than the original sentence.

Diane Abbott: Far be it from me to bandy words with the many lawyers in the Chamber. I repeat that as the Bill goes through Committee we will seek to examine the question of people flouting compensation orders. Overall, in relation to bearing down on money laundering, we welcome the relevant provisions, including the  unexplained wealth orders, the reform to the suspicious activity reports regime, information sharing and the new disclosure orders.
The Bill also deals with tax evasion. In recent years there has been a great deal of public interest and a raft of Government measures on tax avoidance. Arguably, less attention has been paid to tax evasion. There is some blurring between the two terms, but broadly, tax evasion occurs when an individual or corporate entity acts in breach of the law, and tax avoidance occurs when an individual or corporate entity complies with the letter but not the spirit of the law. In recent years Her Majesty’s Revenue and Customs has produced estimates of the tax gap—that is, the difference between the tax that is collected and that which is theoretically due. Clearly, any such estimate must be speculative, but I draw the attention of the House to the fact that HMRC’s most recent estimate of the gap is £36 billion, which is the equivalent of 6.5% of total tax liabilities. Of that £36 billion that is lost, £5.2 billion is lost to evasion and only £2.2 billion is lost to avoidance.
We welcome the measures to bear down on tax evasion, and we welcome the provision that makes it a criminal offence for corporations to fail to stop their associated persons facilitating tax evasion. We particularly welcome the fact that this will have extra-territorial jurisdiction. However, we regret that in the tax evasion measures in part 3 there is no reference to the British overseas territories and Crown dependencies. That is a startling oversight. There are 14 British overseas territories. Just one of them, the British Virgin Islands, is mentioned no fewer than 113,000 times in the Panama papers. BVI, with a population of just 29,000—fewer than my own constituents in Hackney—is home to 452,000 international businesses. Maybe the 29,000 population is particularly skilled at accountancy and banking, but maybe some of those business entities are shells for tax evasion.
There are three Crown dependencies, Jersey, Guernsey and the Isle of Man, and it is frequently argued that the British overseas territories and the Crown dependencies are the largest tax evasion network in the world, so the failure to mention them in a Bill which purports to deal with issues surrounding tax evasion is a major omission. We will be seeking amendments as the Bill goes through Committee. It is frequently asserted that it is not possible to legislate for the British overseas territories and the Crown dependencies, but the Ministry of Justice seems to think differently. This is an issue that we will explore.
The Minister referred to the beneficial ownership register that we are encouraging the overseas territories and the Crown dependencies to introduce, but he must be aware that at least some of the overseas territories are boasting that they are in practice evading the Government’s efforts to get them to set up beneficial ownership registers, and many of them are saying that these registers will not be publicly available. The Opposition insist that if this Government are serious about dealing with tax evasion, they must ensure that the overseas territories and Crown dependencies not only set up beneficial ownership registers, but make them publicly available.
We note that there is little distinction in the Bill between corporate or partnership bodies which facilitate tax evasion, and those that do it routinely and as a  central part of their business model. We believe that we should look into a new provision specifically criminalising entities and individuals for whom tax evasion is at the heart of their business model, and punishing them more harshly.
I shall not conclude my remarks on tax evasion without mentioning the Labour party’s tax transparency enforcement programme. We want a public inquiry to examine the loss of tax revenue, and increased powers for HMRC, including a specialised tax enforcement unit. We want to force foreign firms to list their owners and beneficiaries, and we want the introduction of a general anti-avoidance principle and the extension of current rules to cover offshore abuses.
The Bill deals with the important issue of terrorist finance. Those of us who have watched with horror terrorist atrocities all over the world, and here in London, know that terrorism is an existential threat to us and our society. We share the Government’s aims in reducing the terrorist threat, not just to us in the UK but to our allies and interests overseas, and agree that one way of doing this is to deprive terrorists of the financial resources required for terrorism-related activity. Globalisation means that we must constantly update our legal instruments. We note the changes that the Bill will make to the law enforcement and intelligence agencies in relation to investigations of offences under the Terrorism Act 2000, but we will examine these proposals because we are anxious that they do not have too harsh a bearing on genuine charities.
Labour Members support the Bill in principle. We will scrutinise its detail with care. We insist that it is vital that agencies such as the National Crime Agency get the money they need for implementation, because otherwise the Bill will be a dead letter. For too long, London has been accused of being a hub for money laundering, with all its terrible effects not only on the take of our Treasury but on the lives and countries of many of the poorest people in the world. We hope that this Bill is the beginning of a process that brings the curtain down on the era when London could be described as a money-laundering hub, instead ensuring that London and the UK set an example internationally about what can be done to bear down on money laundering and tax evasion.

Edward Garnier: I begin by declaring an interest. I have been instructed in the past, and I am currently instructed, by the Serious Fraud Office in a number of matters that touch on this Bill and some of its predecessor legislation.
I apologise to my right hon. and hon. Friends on the Front Bench, and to the shadow Home Secretary, the hon. Member for Hackney North and Stoke Newington (Ms Abbott), for the fact that I might not be able to be here for the wind-ups. I hope that my right hon. Friend the Minister for Policing and the Fire Service will forgive me. All being well, however, the debate may run short—if I do not talk too much—in which case I shall be here.
Like the shadow Home Secretary, I broadly support the principle behind the Bill, which I assume is entirely uncontroversial. We all want the criminals whom we hope will be touched by it to be caught and to be prevented from committing such financial crimes. The days  when people went into banks with sawn-off shotguns are long over. Criminals are now much more sophisticated: they go round the back with a set of wires, metaphorically, and extract money out of banks and other financial institutions through computer crime, rather than by using violence. We need to keep up with them. As my hon. Friend the Minister for Security said, we have to be craftier than the crafty hoods.
In our enthusiasm to pass the Bill, however, there are one or two matters about which we need to be a little cautious, although I am sure that, during its passage, the Government will think about how to get the detail right. It could be said that many of the points I am going to set out would be better made on Report than on Second Reading, but I might as well make them while I am on my feet.
Unexplained wealth orders, as a matter of principle, are in line with provisions in the Proceeds of Crime Act 2002 and similar measures, in that they reverse the burden of proof by making the respondent to the order explain himself, rather than requiring the prosecution or the state to make the case against him. That principle is now accepted in our criminal law, and that will continue as long as there are sufficient protections for the respondent. Under the Bill, the High Court may, on an application made by one of the prosecution authorities or enforcement agencies, make an unexplained wealth order in respect of any property if it is satisfied that each of the requirements for making the order is fulfilled. The order will be made in the High Court and the application will be made to the High Court in relation to a respondent who has a criminal connection, but also to politically exposed persons. We need to be careful that politically exposed persons, who will, as I understand it, be foreigners, are sufficiently protected from the making of an application that could trash their reputation and that, even when that is not acceded to by the High Court judge, none the less still leaves him or her exposed to the allegations made against them. I suppose that, to a lesser extent, the same could be said of a respondent with some form of criminal connection.
It seems to me that the way around that is to do what has been done with deferred prosecution agreements in the Crime and Courts Act 2013. Paragraphs 7 and 8 of schedule 17 to that Act provide a way of dealing with those issues so that reputations cannot be damaged until the necessary time when a particular state of affairs has been proved. In deferred prosecution agreements, the parties—the Serious Fraud Office in this case—apply to the court for a declaration that entering into a deferred prosecution agreement with the respondent is likely to be in the interests of justice and that
“the proposed terms of the DPA are fair, reasonable and proportionate.”
That hearing takes place in private. Once the court is satisfied, and the parties are agreed, that the terms of the order are correct, the judge makes an order that is made public, and also makes public the judgment that he made in the private hearing some days or weeks earlier.
That is a perfectly sensible way of maintaining the interests of doing justice in public, while holding in private the initial hearing in the event of an order not being made, or of it being altered in a way that makes the respondent look a lot less guilty than he might otherwise have looked. That allows a hearing to be  heard without damaging an innocent man’s reputation. That is simply a matter of mechanics, and if the Government can spare the time between now and when the Bill leaves the House of Commons, we could achieve the end that we all want, without causing collateral or unintended damage.
I am also a little concerned—perhaps this can be dealt with at a later stage—that clause 1 deals with income as though that were all that needs to be considered. Proposed new section 362B(3) of the Proceeds of Crime Act 2002 states:
“The High Court must be satisfied that there are reasonable grounds for suspecting that the known sources of the respondent’s lawfully obtained income would have been insufficient for the purposes of enabling the respondent to obtain the property.”
Proposed new subsection (6)(d) notes that
“‘known’ sources of the respondent’s income are the sources of income (whether arising from employment, assets or otherwise) that are reasonably ascertainable from available information at the time of the making of the application for the order.”
If “income” simply means money received, I understand that; but if it means income as opposed to capital, we need to make clear that by income we mean not just the interest from capital or a salary, but all that the respondent owns, so that we can capture the distinction between income and capital. A respondent could be capital-rich, but income-poor. We need to avoid a situation where he can get away from the order by saying that his income does not amount to much when we all know, or can anticipate, that his capital is larger. I am sure that plenty of the houses that the shadow Home Secretary spoke about are bought with cash—essentially, they are bought for great lumps of capital—rather than from borrowing.
I am concerned about the Bill’s use of the words “purports to comply”. I appreciate that that expression is to be found in earlier, similar Acts but, to me, purporting to do something means either doing or attempting to do one’s best, or doing something speciously—appearing, falsely, to do something. Albeit that we accept that that expression is used in earlier legislation, we need to be clear that to pretend to do something should not be a defence or an answer to an accusation of failure to comply with an unexplained wealth order.
I turn to the question of enforcement, which has been brought up on several occasions. Let us assume that an unexplained wealth order is made, and let us assume that there is a hearing, initially perhaps ex parte—singlehanded—by the authority. The matter then either comes back for a hearing between both parties, or moves on in some other way. It is all very well making these orders, but that will do no good if we do not have the necessary police officers or investigators to ensure that they are enforced.
I have noticed that in the past with confiscation orders. Very often, the courts make an order, and either the order is never put into action or very little of the amount required from the offender is ever recovered. We need to make sure that this legislation is not simply written in air; it must have real teeth to deter those who think they can get away with this sort of misbehaviour, and to enable the Treasury to recover the ill-gotten gains. I dare say that the same could be said in relation to suspicious activity reports.
Finally on unexplained wealth orders, is there to be any form of appeal system? It strikes me that under proposed new section 362H, an application for an  unexplained wealth order may be made without notice, and I have dealt with points about that. Will the procedure be susceptible to any sort of appeal, and if not, why not?
I turn to the “failure to prevent” provisions, which my hon. Friend the Minister mentioned in his opening speech. I heartily approve of this new system for dealing with corporate misconduct. We saw it first in our jurisdiction under section 7 of the Bribery Act 2010. Although there have been only a few cases involving section 7, it strikes me as being a sensible way of dealing with the difficulty that we face, under English law at least, in pinning criminal liability on corporations. In the United States, a corporate body can be held to be criminally liable because it employed the criminal. It is vicariously liable for employing the criminal and his activities are pinned on the company. In this country—certainly in this jurisdiction—we rely on the Victorian principle of the directing mind. Nowadays, in huge international companies that have hundreds of thousands of employees posted right across the world, albeit that the headquarters of the company may be in this jurisdiction, it is extremely difficult to demonstrate that the directing mind of the company knew what the criminal employee was up to. Section 7 of the Bribery Act gets around that.

Richard Arkless: Although I accept the directing mind principle, does the right hon. and learned Gentleman agree that when employees engage in less than ethical practices—such practices have caused a lot of the problems that we have seen in the UK over the past six or seven years—unless the liability goes to the top of an organisation, the organisation will never develop the protocols and processes required to make sure that those employees are responsible for their actions? Does he accept that point?

Edward Garnier: What the hon. Gentleman says is perfectly true, but I am not sure whether that constitutes accepting what he says. The point I am trying to get across is that companies can avoid liability in the absence of the “failure to prevent” system under section 7 of the Bribery Act. Individuals can be prosecuted and imprisoned, but the company gets away free. The advantage of section 7 is that it brings the company within the ambit of responsibility.
Yes, the compliance system in banks and financial institutions is nowadays much more sophisticated and vigorously engineered, so that everybody from top to bottom should know what they are supposed to do and not do, and so that such a culture goes right the way through the company. It seems to me that there is no excuse for failing to behave properly, since we should all now know what to do. The compliance world is certainly keen to ensure that employees in banks and so forth know what they are supposed to do.
I want the Government not to limit the “failure to prevent” provisions to section 7 of the Bribery Act and those clauses in this Bill that deal with tax evasion, but to expand the regime to all offences that can sensibly be brought under it, as set out in part 2 of schedule 17 to the Crime and Courts Act 2013. The schedule covers 40 or 50 economic or financial crimes that corporations should be required to prevent. That would put a blanket  across a range of criminal financial offences that are not dealt with at the moment, such as fraud, theft, false accounting, the suppression of documents, dishonestly retaining a wrongful credit, the exportation of prohibited or restricted goods and so on. There is a list for the Government to look at. I hope that thought will be given not just to expanding the regime to the evasion of taxation both in this country and abroad, but to some of, if not all, the offences listed in the schedule.
Finally, I want to make a small point, which I suppose comes back to resources. In an online article in “The Brief” from The Times this morning, a senior lawyer at a City firm of solicitors complained that tax officials were failing to use existing tools against tax avoidance schemes while seeking to expand their powers. He said:
“The huge range of swingeing powers HMRC has been given in recent years may have helped its image…but to date they have been little used as an enforcement tool, and some may question whether public time and resources could have been better spent.”
He also said:
“Before granting HMRC yet further powers…parliament should consider very carefully whether such powers are actually needed and ask HMRC to explain why some of the powers it has been granted in recent years have been under-utilised.”
I do not know whether that is pinpoint accurate, but it seems to me that we can do both: we can make better use of the powers provided to HMRC and ensure that it uses them; and we can also widen the ambit of our ability to catch those involved in financial crime and our ability to prevent it by introducing the “failure to prevent” provisions in this Bill in, I hope, an expanded form.

Richard Arkless: Before I go through my speech, I think I can sum up our position on the Bill very succinctly. The crux is that we support in principle the aims of the Bill. To be truthful, there is not much within the four corners of the Bill that we would dispute. Our problem is not with what is in the Bill but with what is not in the Bill, as I will make clear in my speech.
When I studied the financial system at university in the 1990s, the focus of financial crime and of the Government with regard to it was on anti-money laundering regulations and proceeds of crime legislation, which were specifically geared towards getting at the proceeds of drug traffickers and, quite frankly, bank robbers. For the most part, that has worked. Long gone are the days when criminals could easily legitimise buckets of cash from ill-gotten gains. Thankfully, long gone are the days when the only concern involved in robbing a bank was being caught red-handed. The perception of criminals was that if they could evade capture and did not flash the cash, they could eventually spend the money. In many cases, criminals could be incarcerated for crimes and still look forward to spending loot they had stashed when they were eventually released. Money now needs to be accounted for; banks must consider the sources of funds and be satisfied that they are indeed legitimate. Police now have powers to recoup proceeds of crime even if they have been spent by the criminals, and pass them back to the victims.
In my view, we simply could not believe in the rule of law unless we supported such an evolution in rules and regulation. Fairness and the rule of law should be at the  heart of everything we do as a society. It is not fair to anyone to live in a world where criminals are free to generate cash and spend it without fear of repercussion. There simply must be a level playing field for the vast majority of society who play by the rules. The past changes did not merely disincentivise criminals; they drove a police coach and horses right through their plans. There are many famous bank robbers and drug traffickers. We know them; we have watched all the films. I suggest that they simply would not have committed those crimes had we had tougher money laundering regulations then.
The challenges today are very different. We live in an era of evolving financial crime and now face a very different threat from that which we faced a generation ago, when I was at university. It is the threat of grand corruption, particularly in relation to politically exposed people, facilitated for the most part—perhaps unwittingly —by the City of London.
Earlier this year The Guardian revealed through the Panama papers how a powerful member of Gaddafi’s inner circle had built a multimillion-pound portfolio of boutique hotels in Scotland and luxury homes in Mayfair, Marylebone and Hampstead in London. He was head of Libya’s infrastructure fund for a decade and has been accused by Government prosecutors in Tripoli of plundering money meant for schools, hospitals and archaeology. Scottish police have confirmed that they are investigating. Libya has made a request for an asset freeze, but that has not yet been implemented.
These challenges are such that new and tougher legislation is required to give law enforcement the tools to really do something about this problem. We in the Scottish National party support that principle. Although I do not wish to undermine your Office’s consideration of the Bill, Madam Deputy Speaker, I respectfully suggest that the Bill applies to Scotland. There are specific clauses on how the provisions will apply to Scotland.
As far as devolved competencies go, the SNP Scottish Government have demonstrated their commitment to tackling criminal finances and tax avoidance, and boast a successful track record in doing so. In Scotland we have introduced robust anti-avoidance rules on devolved taxes, described by commentators as among the toughest in the world. The SNP Government’s approach to devolved taxes demonstrates that we are deadly serious about tackling tax avoidance in Scotland. For example, the Revenue Scotland and Tax Powers Act 2014 established the Scottish general anti-avoidance rule, which will allow Revenue Scotland to take counter-action against artificial tax avoidance schemes, making it more difficult for people to circumvent the requirement to pay tax.
That said, although we support the broad principle at stake here, we note with interest the clear terms of the most recent Tory manifesto:
“We will continue to lead the world on tax and transparency…We are also making it a crime if companies fail to put in place measures to stop economic crime”
and
“We will…crack down on tax evasion and aggressive tax avoidance”.
Admirable principles, and ones we support, but we have real doubts that the Bill goes far enough to achieve those goals, as I and my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) will make clear as we move through the debate.
Many mechanisms and vehicles are provided for in the Bill. One of the most important, and perhaps the easiest for the public to understand, is the unexplained wealth order. The Bill will enable a court—in Scotland, the Court of Session, upon application by Scottish Ministers—to make an unexplained wealth order. The order will require an individual or organisation to explain the origin of assets if there are reasonable grounds for suspecting that that individual or organisation may be involved in criminality or intend to use that wealth for criminal purposes, and the value of the assets exceeds £100,000.
The order will be available to the court where assets appear disproportionate to known legitimate income—for example, as recently reported, when a taxi driver owns a £1 million fish tank. Failure to provide a response to the order and explain the legitimate source of funds would give rise to a presumption that the property was recoverable, making any subsequent civil recovery action much easier.
As a lawyer, the notion of reversing the burden of proof is not one that sits comfortably with me, but, as in other areas, I consider it to be proportional to the issue at stake. Sound legal principles, such as the presumption of innocence and the burden of proof being on the Crown, should not inadvertently protect criminals, which I suspect may have happened thus far.
Unexplained wealth orders will also help to expose the owners of property. Land Registry figures show UK real estate worth more than £170 billion is held by more than 30,000 tax haven companies. The key to this provision is that a criminal conviction will no longer be necessary before law enforcement can pierce the criminals’ veil that camouflages their wealth. Getting away with the crime itself will no longer protect a criminal’s wealth. The Bill will allow for this power to be applied to foreign politicians and officials, or those associated with them, known as politically exposed persons, helping to tackle the issue of proceeds of grand corruption overseas being laundered in the UK.
I have a couple of specific questions for the Minister relating to unexplained wealth orders. There is a provision relating to interim freezing orders. If an unexplained wealth order is made, one could presume that the respondent would be keen to hotfoot it out of the country with a stash of cash. Freezing orders are available if the court is satisfied that they are necessary. Will the Government consider strengthening this position to ensure that the hotfoot temptation is not available to these criminals? I could imagine the rush to flee—I think we all could. Perhaps an automatic freezing order on the granting of the application for the unexplained wealth order can be considered. Will the £100,000 threshold create a new “out” for grand corruption? Will politically exposed people collaborate with many people to do numerous transactions under £100,000? That should also be considered and we should ensure that the provisions catch those types of activities.
Current legislation does not make it easy to seize criminals’ assets in the form of bank accounts and other value assets, such as precious metals and jewels, or indeed casino chips and high value betting slips. There is evidence, however, that these moveable items are being used increasingly, both domestically and across international borders. The Bill will create new civil powers similar to existing cash seizure and forfeiture schemes in current legislation, which would close that  gap. The powers will be exercisable where there is reasonable suspicion that the property is the proceeds of crime or will be used in unlawful conduct.
The SNP’s 2016 manifesto stated:
“We will argue for changes in the law at Westminster to enable the police to seize items of monetary value from criminals, such as high value betting slips and casino chips.”
I was pleased to hear the Minister state that the changes will be included in a forthcoming amendment. I was struggling to conceive how criminals could be caught by the face value vouchers provisions currently in the Bill, so I was grateful for that statement and I thank the Minister for making it.
On corporate failure to prevent tax evasion, the Bill attempts to legislate on what we understand as corporate economic crime. As we heard from the Minister, the Bill will create two new offences. We support the measures as far as they go, but we see this as a huge missed opportunity. For example, nothing in the Bill would criminalise the banks themselves for their employees rigging the LIBOR market. I suspect that when the public begin to understand which corporate crimes are dealt with in the Bill and which ones are not, they may see this as a slight cop-out and a continuation of the status quo that has got us into so much difficulty. It is uncontroversial to hold companies to account for the tax evasion of their employees. It is tax evasion, for goodness’ sake. The public would expect it to be criminally sanctionable as is. What the public want are stronger measures to hold companies, in particular banks, liable for the crimes of their resident rogue bankers. It seems strange that the Government have ducked this issue.
Speaking as someone who has worked for a well-known retail bank—something that I do not advertise as much these days as I used to—I can testify with absolute certainty that until the banks themselves are in the frame they will never, as I claimed in my intervention, develop the risk management and other protocols necessary to make sure that their agents or employees do not commit these crimes. Only when liability goes to the top will we ever begin to solve these issues.
Will the Government consider reacting to what the public understand as corporate crime, and make banks liable for practices that have caused so much economic heartache to so many ordinary people since 2008? Why should the innocent ordinary punter pay for the mistakes of rogue bankers? If we make these bosses liable, we will see a tightening up almost instantly.

Edward Garnier: As a first step, would the hon. Gentleman encourage the Government to look at the schedule to the 2013 Act, where the economic and financial crimes are set out, to see whether we could get “failure to prevent” provisions added to this Bill on a wider basis? Perhaps the hon. Gentleman and I could then get together to try to persuade the Government to introduce the American vicarious liability system of corporate criminal liability.

Richard Arkless: I have a great deal of sympathy with both of the right hon. and learned Gentleman’s points. I suggest, however, that the first one is rather a half-house measure that does not go far enough. It will not pin criminal liability on the banks. On the second point  about vicarious liability, it is interesting to note that the United States is often considered as the free market monster of the entire world, yet the US feels comfortable with criminalising banks for the actions of their rogue employees. I suggest that we should do the same in the UK.

Ben Wallace: It is a joy as a non-lawyer to be skewered between two barristers in this place, but may I point out to the hon. Gentleman that one reason why the Bill imposes an unlimited fine for a conviction of corporate facilitating of tax evasion is that we believe it will change behaviour. It is one thing to fine a company for a capped fee, but we need to change the attitude not only of the bosses but of the shareholders—and massive fines make a difference. If that is coupled with our provision to increase the powers of the Financial Conduct Authority, we hope that both will help to change behaviour.

Richard Arkless: I agree with the Minister, but my point is that under the Bill, corporate economic crime extends only to tax evasion and not beyond it. Within the four corners of the Bill, there is relatively little to disagree with, but it does not go beyond tax evasion, which I think is a huge omission.
SNP Members can support other parts of the Bill without much hesitation—for example, the expansion of the suspicious activity reports regime, information sharing disclosure orders and combating terrorism. We support all those measures in principle. Notwithstanding our in principle support, we do not think it goes far enough, as I have said.
I shall shortly go through some of the issues that we think are missing from the Bill. Before I do so, however, I wish to make a small point about the time we have had to consider this Bill and its contents. We do not agree that the Scottish Government were given adequate time to scrutinise them. The Bill has been instructed and drafted with high speed, admirable though that may be, but with limited consultation. Only in the last fortnight were we shown draft clauses that related to unexplained wealth orders and mobile items of value—and even then, they were tagged “in confidence”. That said, we welcome the move to extend to Scotland the powers for wealth orders and disclosure orders, as requested by the Scottish Government.
For these reasons, the Scottish Government have not had the chance—and neither have I—to consider the Bill in sufficient detail, to consult Scottish stakeholders properly or to provide the Minister and the Government with some detailed advice. The Scottish Government will do so in due course. In addition, we are already aware of concerns among some Scottish stakeholders, particularly the civil recovery unit, that their advice has not been fully listened to and acted upon by the Home Office, and that the current approach adopted in the draft seizure and forfeiture powers provisions may not be the most effective available. I would encourage the Minister to continue his dialogue with the Scottish Government. He demonstrated yesterday evening that that is ongoing, for which I thank him.
So what is missing? It remains the case for us that the most notable aspect of the Bill is what is not in it. The headline objective of the Tory manifesto in this context was to deal with tax evasion, but, as has already been pointed out, the Bill makes absolutely no mention of  the United Kingdom overseas territories and Crown dependencies. Given the aforementioned statement of intent in the Tory manifesto and the problems highlighted by the Panama papers—and the public reaction to the Panama papers—that omission seems very odd and very peculiar indeed.

Joanna Cherry: The OECD estimates that tax havens may be costing developing countries a sum up to three times the size of the global aid budget. Does my hon. Friend agree with me, and with the charity Christian Aid, that the most effective way in which the Government could tackle corruption and counter the financing of terrorism would be to set a deadline by which the overseas territories and Crown dependencies would have to adopt the same level of transparency as the rest of the UK, and does he agree that the Bill constitutes a missed opportunity for them to do so?

Richard Arkless: Unsurprisingly, I agree wholeheartedly with my hon. and learned Friend. I should like the Minister to consider whether there is any way in which we could compel the overseas territories and Crown dependencies to publish registers of beneficial ownership, which would provide much needed transparency in what is turning out to be a bottleneck in the fight against tax evasion.

Joanna Cherry: Does my hon. Friend agree that there is a precedent? The Government have repeatedly legislated in respect of overseas territories—for example, on issues relating to corruption, abolishing the death penalty, pirate radio, and the decriminalisation of homosexuality.

Richard Arkless: Again unsurprisingly, I agree with my hon. and learned Friend. Where there is a political will, there will be a way. If the Government were inclined to legislate in relation to the overseas territories and Crown dependencies, I have no doubt that that could be done, but the omission indicates to me that there was not the necessary political will.
We do not believe that the Bill will tackle tax avoidance appropriately. Avoidance has increased under the Conservative Government. Last year the UK tax gap was a staggering £36 billion, and, despite the positive rhetoric emanating from the Tory Front Bench, it has increased by £2 billion on last year. More needs to be done in the Bill to achieve everyone’s stated aims.
Why does the Bill not address the tax code? The UK has one of the most complex tax codes in the world, which has clearly led to opportunities both to create new loopholes and to exploit existing ones. We therefore call on the Treasury to convene a commission, and to report back within two years following a comprehensive consultation on the simplification of the tax code. By opening the door to a simplified tax system, the Government could boost tax yield, encourage compliance, and avoid exploitative loopholes such as the Mayfair loophole and employee benefit trusts.
Changes are one thing, but they could become meaningless if we do not allocate the resources that are necessary to ensure that the Bill and subsequent measures have real effects. We think that the Government’s decision to close 137 HMRC offices will be completely counterproductive in relation to the laudable aims of  the Bill. Those resources are needed to boost compliance, not to mention the human cost that has been incurred by families, employees, communities and local businesses.
Let me make one final point to the Minister, which will be expanded later by my hon. Friend the Member for Kirkcaldy and Cowdenbeath, and which we discussed yesterday evening. My request is for the wholly reserved issue of Scottish limited partnerships to be dealt with in the Bill, which it is not at present.
It is the view of the Scottish Government that a legislative consent motion will be required to give effect to the provisions covering seizure and forfeiture powers and unexplained wealth orders, and some of the minor and technical changes in the Proceeds of Crime Act 2002. The motion will also include the specific provisions on civil recovery and criminal confiscation that the Scottish Government require to be included in the Bill.
We will not trigger a Division this evening, but we want to reiterate very firmly that the Bill does not go nearly far enough in dealing with what I think is a real and tangible outcry from the public, given what has happened over the last five, six or seven years. If we are serious about creating and maintaining confidence in the banking system—which has completely evaporated—we need to tackle this issue head on, and do more than we are doing in the Bill.

James Berry: I rise to support the Bill—not to complain about what is not in it, but to praise the Government and agree with them on what they have put in this bold Bill.
I should declare I am a barrister and have represented a number of police forces across the country. That experience has taught me two things. The first is a genuine admiration for the men and women of our fantastic police service for their dedication to the task of keeping us safe. Thanks to their excellent work, led by Chief Superintendent Glenn Tunstall, Kingston is now the safest borough in London. However, as I learned at our recent police awards, even in London’s safest borough, there are humbling examples of everyday heroism and compassion by our police officers. We do not hear enough about them, but we are truly grateful.
I pledged at the election to do what I could to give the police the tools they need to do their job. That leads me on to the second thing my experience with the police has taught me: there are a number of powers in this Bill that the police have been, and still are, hamstrung without —where they are powerless to act in the face of wrongdoing.
Before talking about those powers, I want to make a broader point. I am proud to serve as a London MP, representing those who live and work in the best city in the world. London is the world’s financial services capital and I know the Government are working as hard as they can to ensure that that remains the case after Britain’s exit from the EU. But over the last few years there have been reports that London is becoming the capital of something rather more insidious—money laundering.
Following the global financial crisis, property in London has become one of the safest investments in the world. Rich criminals and money launderers are attracted to it in the same way as people who make their money legitimately. Put shortly, Londoners want this stain removed from their city. The Bill will help to do that.
It is not just London: the National Crime Agency assesses that billions of pounds in proceeds of international corruption are laundered into or through the UK every year. Her Majesty’s Revenue and Customs estimates that £4.4 billion was lost to the Exchequer last year alone due to tax evasion in the UK. Globally, laundered money is estimated to amount to 2.7% of GDP, or $1.6 trillion. To put that in perspective, there are only nine countries in the world with GDPs greater than that.
As the leading nation in the world for soft power, and as a nation that is trying to lead the global debate on anti-corruption, we need to ensure that our house is in order. The Bill is part of the Government’s wider efforts to ensure that that is the case. I want to touch on a few aspects of the Bill.
The first is unexplained wealth orders. We have seen many cases in the press where individuals suspected of grave criminal offences are living lavish lifestyles well beyond what any legitimate income they could evidence could possibly support. It is insulting to the many hard-working people in the UK who play by the rules and go to work day in, day out to earn an honest living to support themselves and their families to see this happening. It creates a feeling of impunity in the upper echelons of criminality.
Unexplained wealth orders will require those suspected of being involved in, or associated with serious criminality to explain the origin of assets of over £100,000 that appear disproportionate to their known income. A failure to provide a response, or a satisfactory response, could lead to a presumption that the property in question is recoverable in civil proceedings.
Unexplained wealth orders will have to be made by a High Court judge on application by a relevant law enforcement officer. Even with those protections, as might be expected of a lawyer, I ask the Minister to give a little more assurance about the nature of the protections in place, given that the measure does reverse the burden of proof that normally rests on the Crown. I am sure that he will be able to provide that reassurance, and I entirely agree with the hon. Member for Dumfries and Galloway (Richard Arkless) that that appears to be proportionate in this case, given the severity of the situation that law enforcement officers face.
Secondly, on enhanced forfeiture powers, I have spent many mornings in magistrates courts up and down the country making applications under the Proceeds of Crime Act 2002. I have some familiarity with this area. The current powers under the POCA apply to cash. The police may seize it when they have reasonable grounds to suspect that it is the proceeds of crime. They may then apply to the magistrates court to forfeit that cash. A classic example is a shoebox found in a house containing some drugs and rolls of cash. However, the provisions apply to cash alone. The more sophisticated criminals do not have rolls of cash and a little bit of cannabis or cocaine in a shoebox. They have their money in bank accounts and in high-value items of personal property, which are much harder to trace and much easier to move around, domestically and internationally. Such items include precious metals and jewels—and indeed betting slips. I am grateful to the hon. Member for Dumfries and Galloway for drawing those to the Government’s attention. His information appears to be  being acted on. The seizure and forfeiture provisions in the Bill extend the cash seizure powers in POCA to bank accounts and high value-items. That will mean that the law and the police’s powers are keeping up with the ways in which crimes are being committed. That is a welcome move.
I now turn to part 3 and the new offence of corporate failure to prevent tax evasion. This is another manifesto commitment that the Government are delivering on today. It is already the case that a taxpayer who fraudulently evades a responsibility to pay tax commits a criminal offence. A person such as a banker, accountant or tax adviser who knowingly assists a taxpayer to fraudulently evade a responsibility to pay tax is committing a criminal offence, but the company employing that banker, accountant, tax adviser or other professional who criminally facilitates tax evasion does not commit any offence. The company is outside the reach of the law. The Bill aims to bring those companies within the reach of the law, not to duplicate the criminal liability of their employee or agent but to criminalise a failure by the company to prevent those acting on its behalf from facilitating tax evasion. It will criminalise the company for allowing an atmosphere to be created in which that tax evasion is possible.
That might seem draconian, but it is absolutely necessary. Companies will have a defence, much as they do under health and safety legislation, if they can show that they had reasonable prevention procedures in place. The new offence will be the stick that will drive up companies’ efforts to ensure that their internal procedures do the utmost to prevent their employees from facilitating tax evasion. It will drive up standards in the whole sector, and that is long overdue.

Richard Arkless: I am listening with great interest to what the hon. Gentleman is saying. Does he agree that there is a real case to be made for extending the provisions on corporate economic crime beyond the tax evasion issues covered by the remit of the Bill?

James Berry: That is certainly something that could be looked at and consulted on, but the Bill is achieving a manifesto commitment to do exactly what it says on the tin. That is what the Government are trying to deliver today.

Richard Arkless: rose—

James Berry: I will carry on, if I may.

Mark Tami: Will the hon. Gentleman give way?

James Berry: No.
I hope that this provision will have the same effect that health and safety legislation has had, with companies taking the lead in rooting out bad practice to avoid being liable themselves for incidents caused by their employees. Some businesses might dismiss this as red tape, but if it is red tape, it is important red tape that is focused on the aim that it is trying to achieve. It is important to ensure the integrity of our world-leading financial services sector in London, and these measures have been welcomed by many in the industry, including  the chief executive of the British Bankers Association, even though I do not necessarily support the utterances he made earlier this week.
I have touched on just a few of the provisions in the Bill. It also contains many tidying-up provisions that are extensions of existing laws and that are based on feedback given to the Government by the police and law enforcement agencies on the deficiencies in their current powers. That approach is to be warmly welcomed, because when it comes to the fast-moving world of criminality that our police are trying to prevent and detect, we in this House must be fleet of foot. I believe that the Government are achieving that today. I am sure that hon. Members on both sides of the House will welcome the aims of the Bill unreservedly, and I hope that by the time it has been through its Committee stage, all its clauses will have been accepted.

Margaret Hodge: This speech represents two firsts: I am the first non-lawyer to speak from the Back Benches; and I think I am the first to acknowledge the role played both by our former Prime Minister and by the right hon. Member for Brentwood and Ongar (Sir Eric Pickles), who was the anti-corruption tsar, in providing leadership on anti-corruption. They should both be acknowledged today as their work led to what we are considering. I agree with everyone who has spoken today that the Bill is extremely important. Whether from the National Crime Agency or HMRC, the estimates of the billions of pounds that are laundered through the UK or lost to public services because HMRC is unable to collect them make this an important measure. I fear, however, that the rhetoric that many have been given to this afternoon does not reflect the reality, so I hope that the Minister will able to respond to the points that I raise.
Others have mentioned the omission of tax havens, and the failure to take action on the overseas territories and Crown dependencies, which act as key jurisdictions in support of tax evasion, tax avoidance and corruption, is a grave error. I hope that the Minister will reflect on that during the Bill’s proceedings and see whether we can introduce some amendments. The Government’s failure to mention such territories makes them complicit in facilitating the very corruption that they say they want to tackle through the Bill.

Jim Cunningham: I agree with my right hon. Friend and previous speakers that, were something done about the overseas territories and Crown dependencies, that would give the Government more credibility. They have committed to report annually on tax avoidance in some of these overseas tax havens—for want of a better term. Does she agree that, if they are going to negotiate with other Governments to get them on board, they should do something about the overseas territories?

Margaret Hodge: I agree entirely with my hon. Friend’s comments.

Mark Tami: While we support the Bill, does my right hon. Friend agree that the danger is that we might drive even more business to the overseas territories and encourage even more of the problems that have already been identified?

Margaret Hodge: Indeed. I would also add that the Brexit provisions might also lead to increased activity through the overseas territories and tax havens, so there are several dangers.
A number of Members have mentioned the evidence that backs up the importance of the Bill, but I want to point out two or three facts that have not yet been raised. The World Bank reviewed 213 corruption cases from a 30-year period between 1980 and 2010. Shell entities were involved in 70% of them, and UK Crown dependencies and overseas territories were second after the US on the list of those who provided shell entities. That is clear evidence of the importance of the role played by the Crown dependencies and overseas territories. Do we always have to wait for another leak to understand that? We will keep on getting them—the Mossack Fonseca leaks and the Panama papers will be just one in a stream. If we look at the information we garnered from the leaks, over 200,000 corporate entities were exposed, more than half of which were registered in the British Virgin Islands. I ask the Minister to consider that.
I also came across the African Progress Panel, which found that citizens of the Democratic Republic of the Congo were deprived of some £1.35 billion—twice their health and education budgets combined—due to the sale of mining contracts to five anonymous BVI companies. Those assets were sold at about one sixth of their commercial value, enabling the secretive offshore companies to sell them on and secure profits of more than 500% of the original moneys they paid. Again, desperately needed resources were lost to the poorest countries in the world.
If we are really to tackle the corruption, evasion and avoidance that occur in jurisdictions over which we have ultimate control, we must have the transparency that a number of Members have asked for this afternoon.

Ben Wallace: I have listened carefully to what the right hon. Lady said. Will she not concede that since the lead-up to the London anti-corruption summit in May, the Crown dependencies and overseas territories have agreed to establish a central register of beneficial ownership and a data-sharing system with the UK enforcement agencies that will give us access to those data almost in real time, and that that goes a long way to meeting some of her concerns? I recognise that the Scottish National party would like this to be public as well as shared with our law enforcement agencies, but it still goes some way on this issue. On the other side, the unexplained wealth orders for politically exposed persons will allow us to grab the money should they put it in this country and live in the nice houses that they sometimes seem to live in.

Margaret Hodge: In my view, and indeed the British Government’s view, publicising those registers of ownership is crucial. We decided to do that for ourselves, so why are we not using our powers to enforce it on the Crown dependencies and overseas territories? There are multiple reasons why we have decided to do it for ourselves, and I shall mention two of them. First, for many of the poorer countries, getting their agencies up to speed so that they can pursue people and know what questions to ask is tough, and public registers make it much easier for those people to be interrogated. Civil society should interrogate them, and the registers make it much more likely that the type of activity that I mentioned in the DRC is revealed.
Secondly, we are talking about a very reactive response; if a register can be interrogated only by the international agencies that are allowed to have access, people will have to know that there is something they are after before being able to discover whether or not there is information about beneficial ownership that is relevant to a criminal activity or to aggressive tax avoidance and so on. Such an approach presupposes a degree of intensive resources and knowledge that will not necessarily be in place. Although one of course welcomes the creation of these registers, having them made public is central to making them work.
The Minister should not listen to my words on this, but to those of the former Prime Minister, who was absolutely clear, year on year, when talking about these issues, that the openness and transparency of these registers was what mattered. In 2013, he said to the Crown dependencies and overseas territories that they had to rip aside the “cloak of secrecy” by creating a public register of beneficial ownership. In April 2014, he wrote to the overseas territories, saying that
“beneficial ownership and public access to a central register is key to improving the transparency of company ownership and vital to meeting the urgent challenges of illicit finance and tax evasion.”
He also expressed his hope that overseas territories would follow suit to
“consult on a public registry and look closely at what we are doing in the UK.”
On a trip to the Caribbean in September 2015, he said:
“Some of the British Crown Dependencies and Overseas Territories are making progress in this direction. And others, frankly, are not moving anywhere near fast enough. I say to them all today, including those in this region”—
the Caribbean—
“if we want to break the business model of stealing money and hiding it in places where it can’t be seen: transparency is the answer.”
When we established our own public register here in the UK, David Cameron said that
“there are also many wider benefits to making this information available to everyone. It’s better for businesses here, who’ll be better able to identify who really owns the companies they’re trading with. It’s better for developing countries, who’ll have easy access to all this data without having to submit endless requests for each line of inquiry. And it’s better for us all to have an open system which everyone has access to, because the more eyes that look at this information the more accurate it will be.”
I simply say to the Minister that I really do agree, in this instance, with the former Prime Minister and I hope the current Government will listen carefully to his wise words.

Joanna Cherry: The right hon. Lady is, as one would expect, making a very powerful speech. Does she agree that the Government can be comforted by the thought that extending this transparency to the tax havens would be a very popular move with the public, as YouGov polling shows that more than two thirds of people think that the Government should take such action? Research published by Oxfam shows that there are high levels of support for extending this transparency across the political spectrum.

Margaret Hodge: I, too, have seen that survey. Any action that the Minister takes will be warmly welcomed by the public across the whole of the United  Kingdom—by people of all ages and all genders. This is a really important bit of work, and I hope that the Minister will take it seriously.
I am concerned about the action taken so far. I am concerned that in December 2015 when we had the Overseas Territories Joint Ministerial Council, the Government failed to persuade those territories to implement public registers. I am concerned that, in March 2015, the Cayman Islands and the British Virgin Islands refused to meet Ministers from the Foreign Office and the Treasury. I am concerned that they failed to meet the Financial Secretary’s request that they adopt registers by November 2015. I am concerned that—as I understand it—they have ignored letters from UK Ministers. I am deeply concerned that tax is not even on the agenda for the forthcoming meeting of the Overseas Territories Joint Ministerial Council. I hope that the Minister can address that point. We do have the powers, and, as was mentioned in a previous intervention, we have used them before. The Government must act.
If the Minister could at least tell us that he will set a timeline, at the end of which, if matters cannot be resolved in a collective and collaborative way with the overseas territories and the Crown dependencies, the Government will use their power. That would go a long way to settling some of our concerns today. I hope that he can at least consider that as a possibility for taking the matter forward.
May I briefly comment on some of the other provisions in what is a warmly welcomed bit of legislation? On the unexplained wealth orders, it is particularly welcome that they will be applicable no matter where in the world the offence takes place. May I ask the Minister two questions? If the money comes from an overseas territory —a developing country, for example—will there be a notification to that country of the setting of an unexplained wealth order? Again, our enforcement agencies will be more capable than some others in pursuing laundered money.

Ben Wallace: I can get an exact answer to the right hon. Lady’s question. Just around that, though, we have started to sign memorandums of understanding with a number of countries—we signed one in August with Nigeria—to help them recover their assets, without barriers between here and there, and to assist them, both in their country and here, with tackling crime. Once they find their assets, we will get them back to them as soon as we can.

Margaret Hodge: I am grateful to the Minister for providing that information. Will he explain why the orders do not apply to politically exposed people inside the European economic area? Will he look again at that issue, because there may occasionally be a relevant instance where that is important?

Ben Wallace: That is quite straightforward. We are unable under EU law to discriminate against different members of the EEA in relation to the UK citizen. What we do for the UK citizen we also have to do for other members of the EU.

Margaret Hodge: I wish to raise two other issues. One arises from a debate held in the House on March 2012, initiated by the hon. Member for Esher  and Walton (Mr Raab), on what is known as the Magnitsky-style amendment. The argument there arose from the horrific and brutal killing of Sergei Magnitsky—a Russian lawyer who was tortured and murdered because he uncovered a huge $230 million tax fraud in Russia. Allegedly, $30 million of that found its way laundered into the UK, according to evidence given to the Home Affairs Committee.
The hon. Gentleman proposed something similar to an amendment enacted in America—he and I would support such an amendment during the proceedings on the Bill—that would have ensured that foreign individuals involved in corruption and human rights abuses had their assets frozen, be denied right of entry to this country and be publicly named and shamed. Again, although that is slightly different to other provisions in the Bill, I think that there is strong cross-party support for introducing a Magnitsky-style amendment into UK legislation.
I hope that the Minister will look favourably on such an amendment. I have looked at the details, and a particularly disturbing aspect is how many UK banks were involved in the laundering the alleged $30 million into the UK, according to evidence given to the Home Affairs Committee. They include Barclays, HSBC, NatWest, Bank of Scotland, RBS, Citibank, Bank of America, Lloyds TSB and the Bank of Tokyo. I hope that, from that horrific tragedy, we can introduce an important change in our legislation.
Finally, I want to talk about the corporate failure to prevent tax evasion, which other hon. Members have spoken about. I welcome the Bill as the first attempt to place responsibility for tax evasion not just on individuals but on corporations. However, this is a very small first step towards making those who are responsible for devising, advising and facilitating evasion and avoidance accountable for their actions.
Before we go over the top on saying what a great change the Bill represents, we should realise that it will apply only where a criminal offence has been successfully prosecuted against an individual or where an individual adviser has committed an offence when working for a corporation. It does not cover negligence by the corporation. It will not make the corporation responsible for the crimes of its staff. It does not cover aggressive tax avoidance. Unlike my Front-Bench colleague, I think that that is where the important bit of action must be taken if we are to ensure that we get the resources into coffers according to people’s wealth and their profits and incomes.
The Bill simply asks that reasonable procedures are in place, which is a risk-based and proportionate exercise, so it does not represent a fail-safe procedure. As I think through some of the instances we heard about during my time chairing the Public Accounts Committee, where we felt that corporations were misbehaving, I do not think that it would cover PricewaterhouseCoopers and all the stuff that it was doing in Luxembourg, where it was clearly selling schemes in an industrial way that had no other purpose than to avoid tax. We had a discussion earlier today about Heathrow. I do not think that it would cover Heathrow, which has managed to avoid paying a heck of a lot of tax on massive billion-pound profits that it has made. I do not think that it would cover Google. I do not think that it would cover—this is really important—the fact that when we interviewed  advisers about the tax advice they give to corporations and individuals, they said that they would give advice so long as there was a 50% chance that it was not challenged by HMRC. The reverse of that is that there is a 50% chance that it will be challenged by HMRC, but given the size of the task and HMRC’s limited resources, it takes a long time to catch up with such schemes and does not have the resources that some of the big accountancy firms, advisers, banks and lawyers et al. have. That will not be caught by the first welcome but small measures that are being taken.
From all the work that we did in the PAC, the only thing that I can think would be caught is probably HSBC’s actions when the non-executive director, Rona Fairhead, gave evidence to us and sought to blame the whistleblower in that instance for being a thief—I thought that that was pretty awful—and blamed the front-line staff for doing what was obviously expected of them by the organisation for which they worked. She, as a non-executive director earning £500,000 a year at HSBC, felt that she did not have any responsibility to ensure corporate governance. The measure might catch that sort of instance, but it is very limited, and as we examine the Bill, I would welcome opportunities to extend that important first step in ensuring corporate liability as well as individual liability and accountability for actions that have been taken. I warmly welcome the Bill and I hope that the Minister can take the further steps that I have suggested.

Nusrat Ghani: It is a pleasure to follow the right hon. Member for Barking (Dame Margaret Hodge). I would also like to put on record the fact that I must be the second non-lawyer to speak in the debate.
I support the Bill, especially its provisions on countering terrorist financing. In November last year, shortly after the horrific terrorist attacks in Paris, I wrote to the then Prime Minister, the former right hon. Member for Witney, to raise my concerns about overseas funding received by religious or educational establishments in this country that radicalise and promote extremist values—basic criminality—whether they network through individuals, mosques, schools or community groups. I argued that if an organisation is unwilling to agree to a set of tolerant principles that society considers acceptable, it is not unreasonable to prevent it from receiving dubious funding from overseas. I am not so naive as to overlook the accusation that that approach could itself be seen as intolerant, but we have accepted that there are rules to which the funders of political parties and unions must adhere, so why not the funders of other important institutions? Extremism is a symptom of criminal ideology, and we must cut off any finance that helps to spread an ideology that promotes criminality, extremism and violence.
The Bill builds on the Government’s action plan for anti-money laundering and counter-terrorist finance by putting into law one of its main principles: more information sharing between the private and public sectors. It goes without saying that we cannot disrupt terrorist financing unless we know about it, and I welcome the fact that that is fully recognised in the Bill through concrete measures to deal with the problem. Measures to introduce a disclosure order regime under terrorism legislation offer new opportunities to uncover illicit financing of terrorist or extremist behaviour and the promotion of criminality. We have seen the benefits of the work  of accredited financial investigators in proceeds of crime investigations, and it is right that those benefits should be extended to counter-terrorism investigations with the extension of powers to AFIs in the Bill.
We need to go further with provisions that are not appropriate for inclusion in this Bill but would, in my view, strengthen its provisions. Perhaps I may be so bold as to make a suggestion. The vast majority of churches are registered as charities, which means that their finances are transparent. I would suggest that a formal register of mosques in the United Kingdom would make it far easier to investigate their financial affairs and their recruitment of imams, especially if those people come from overseas. That would help us to understand the strand of Islam that they wish to promote, and it would flush out sources of financing that promote the intolerant ideas that put us at risk of harm from criminals who use those ideas to justify their actions.
The Islam that came to this country with the communities that settled here after the second world war is not the Islam that is being exported by Daesh today. With many of our communities and mosques feeling that they are under siege from that foreign death cult, it is our duty to protect those communities and show that we stand by them in countering extremism. As a member of the Home Affairs Committee, I have seen all the evidence that I need to justify our hard-headed response to the threat of terrorism and criminal extremism. I hope that the Government will consider such a step when the appropriate vehicle arises.
As of June this year, some 165 people were in custody for terrorism-related offences, and domestic extremism and separatism, but there are still individuals and organisations based overseas that have a mission to spread insidious intolerance and violence, which requires funding that travels across borders. As terrorist groups organise and reorganise, they need access to well-funded diverse networks, and they are becoming increasingly complex and sophisticated. Technology and the proliferation of financial instruments challenge the authorities’ ability to accurately trace and counter the flow of funds, but one thing remains the same: the objectives of terrorists. They seek to divide our communities, spread fear and hate, and undermine the good work of community leaders who do everything they can, often in the face of unhelpful opposition, to make sure that their communities are safe.
By enhancing our ability to counter the financing of terrorism, we are taking another step in preventing the spread of organised crime and terrorism. The Bill offers the Government’s support to leaders and communities, makes us all safer, undermines the financial management of terror groups and co-ordinates legal measures to combat them. I therefore warmly welcome it.

Chris Evans: I congratulate the hon. Member for Wealden (Nusrat Ghani) on a rather succinct speech. There are many things that divide us in this House, but the subjects that she was talking about bring us together.
It is a pleasure to follow my right hon. Friend the Member for Barking (Dame Margaret Hodge), formerly a formidable Chair of the Public Accounts Committee,  of which I am now a member. I know that her studs have been felt by many a civil servant and many in the private sector. A lot of people are pleased that she is no longer the Chair of that Committee, but I am not one of them.
For too long, law enforcement agencies have had to fight organised crime and terrorism with one arm effectively tied behind their back. It is simply not possible to counter organised crime and terrorism as effectively as is necessary without the power to investigate properly, and to confiscate criminal property and the proceeds of crime. Like many other speakers in the debate, I broadly support in principle most of the Bill’s measures. It is right that those who have gained assets in suspicious circumstances should be asked to explain where those assets came from. Where it is found that they have been involved in crime, and that those assets are the proceeds of crime, law enforcement should be able to confiscate and seize assets beyond cash. That is the only way to ensure that justice is done and for the proceeds of crime to be returned to the system and used for the public good.
Information sharing between banks is key to the investigation of financial crimes, so I am pleased that the Bill includes measures to improve that. Perhaps the Minister will tell us whether the banks have made any response. When I have talked about the sharing of data, they have been reticent, citing reasons of competition. I hope that concern has been overcome and that the Bill will provide good law.
Following the shocking revelations earlier this year in the so-called Panama papers, I am pleased that the Government are fulfilling their commitment to be tough on the middlemen involved in tax evasion and other financial crimes. Corporations and their employees who are involved in facilitating tax evasion and other financial crimes in the UK and internationally must be held to account. I welcome the fact that investigations into terrorist financing are covered by the Bill. If we are to clamp down on violent extremism, it is vital that such groups do not have access to the resources that they need to commission their acts of evil.
I believe, however, that some elements of the Bill are vulnerable to being undermined. Although its measures would apply in the United Kingdom, it does not appear that they would extend to British overseas territories and Crown dominions. This problem must be addressed, otherwise there is a risk that the Bill and law enforcement agencies’ ability to investigate crime will be weakened. In particular, British overseas territories such as the Cayman Islands and the British Virgin Islands have lamentable policies on transparency. I know that the former Prime Minister was desperate to change the situation and pay tribute to his work in that respect. Those islands literally harbour money, as they are the registered home of some of the largest and most valuable super-yachts in the world. Anybody can walk across any harbour in Spain or Italy, or see at sea, the Russian oligarchs’ huge super-yachts that are registered to the Cayman Islands. One has to ask why a Russian oligarch finds the Cayman Islands such an attractive place to register his rather large boat.

Gregory Campbell: It is the weather.

Chris Evans: It could be the weather, although I wonder whether the reason is something a little more sinister.
These islands have not agreed a timetable for introducing public, or at least central, registers of beneficial ownership of trusts and other companies, which are often used to launder money and hide assets. If the Government indeed intend to use the Bill to tackle money laundering and corruption, to recover the proceeds of crime, and to counter terrorist finance, their aim might be undermined as, by moving money between secret trusts and offshore companies, some of the most serious and organised criminals, including those who commission acts of terrorism, could still operate.
While the need to tackle organised crime and terrorism is important from a domestic standpoint, it is also important that we play our part in tackling international corruption. A review by the World Bank found that in more than 70% of 213 serious corruption cases, secret company ownerships were relied on to facilitate the corruption. The UK, alongside our overseas territories and Crown dominions, provided the second largest number of those companies. That situation demands urgent action.
It is sometimes hard for us to understand the serious effects of corruption, as corruption is largely under control in mainland Britain and Northern Ireland and is swiftly dealt with whenever it emerges. In developing countries, however, the misuse of public funds has a devastating impact. The Africa Progress Panel found that $1.35 billion had been stolen from the citizens of the Democratic Republic of the Congo due to the sale of mining contracts for just one sixth of their commercial value. Those contracts were sold to five anonymous companies based in the British Virgin Islands. To give some perspective on the scale of that loss to the people of the Democratic Republic of the Congo, $1.35 billion equals twice the country’s health and education budgets combined. That devastating loss is another sad chapter in the country’s long and tragic history of corruption, murder, death and executions, with many women, girls and children having become victims of a tyrant.
It might be unwise, for constitutional reasons, for the UK Government to use the Bill to force British overseas territories and Crown dominions to introduce more transparency, but it is clear that they must take action. Earlier this year, the former Prime Minister laid out a welcome commitment to transparency and urged all British overseas territories and Crown dominions to make changes. We can all agree that that was an important step forward, but the momentum has been falling away and more action must be taken. Real people are losing out every single day as a result of international corruption, organised crime and, yes, terrorism. If the Government are serious about countering that, and meeting our duty not only to ourselves but to others around the world, they must now stop dragging their feet on this very important issue.
As I said, I welcome the principle behind the Bill, but I fear that it will not do the job that is intended. I look to the Government and the Opposition to table amendments that would improve it. The Government are not covering all the bases, especially with regard to British overseas territories and Crown dominions, and I fear that that could lead to some of the Bill’s measures being circumvented. The Government must match their words with actions and commit to putting far more pressure  on British overseas territories to embrace transparency. Only once transparency has been achieved will the Bill be able to meet its aims of ensuring that UK-based and international criminals and terrorists are stripped of their resources, and that our citizens are safe, wherever they live.

Kirsty Blackman: I had not been in a debate with the hon. Member for Islwyn (Chris Evans) until this morning, and now we have the pleasure of two in one day.
It is very strange to stand here and talk about the Criminal Finances Bill, because I think that a lot of the things under discussion are totally alien and completely baffling to many of my constituents. Many of them will be thinking, “Why aren’t we doing this stuff already? Why has it taken so long for Governments to get around to addressing the issues?” That is particularly true of unexplained wealth orders, which, for the avoidance of doubt, I support. It is a good idea to introduce them, but I am sure that many people are wondering why that has not happened before.
Most of my constituents will only ever pay tax through pay-as-you-earn. None of the taxes under discussion, such as corporation tax and inheritance tax, apply to them, so they will not know quite how complex the UK tax code is, or that a van is needed to transport it, as is regularly mentioned in this Chamber. I am aware that repetition is allowed—in fact, it is positively encouraged—in this place.
The fact that the tax code is so complex means that it is very easy for people to find and exploit loopholes in it. I appreciate the Bill’s measures to close at least some of them, but there are some glaring omissions. As my hon. Friend the Member for Dumfries and Galloway (Richard Arkless) has said—I am sure that my hon. Friend the Member for Kirkcaldy and Cowdenbeath (Roger Mullin) will mention this, too, because I may have read his speech—Scottish limited partnerships are still missing from the measures. We have brought up the issue and it has been widely reported by The Herald. I think that people in Scotland who have read those articles will be clear that the UK Government need to fix that and that they can do so relatively easily because of the high percentage of SLPs that are being used for financing crime.
The right hon. and learned Member for Harborough (Sir Edward Garnier) mentioned the Victorian principles behind some aspects of finance and tax law. That is a big problem. A lot of the laws have evolved over a number of years and there has never been a wholesale review. The approach has been not “Let’s take it all apart and start again,” but “Let’s tinker by adding a little bit and taking away a little bit.”
When some of the tax powers were devolved, Scotland was, in some ways, in a much better position, because we could start with a much cleaner slate. Our general anti-avoidance rule was said by Isobel d’Inverno, convenor of the tax law sub-committee of the Law Society of Scotland, to be
“much fiercer than the UK one.”
It has also been widely commented that the Scottish Government are in a positon to have a much stronger law and stronger rule, and that that has been beneficial for us to administer the devolved taxes.
As my hon. Friend the Member for Dumfries and Galloway has said, we are calling for a moratorium on the closure of HMRC offices. If it is a massive priority for the UK to ensure that tax loopholes are closed and that criminals do not exploit the tax system, particularly through tax evasion, it is bizarre that offices are being closed, rather than more staff being taken on and more resources being spent on ensuring that such exploitation does not happen. I would appreciate it if the UK Government would reconsider, again, the loss of those important offices and dedicated staff. That is key.
What the Government are doing and the way in which the current system is set up do not encourage people to have confidence in the economic system. It is much like the House of Commons, which is set up in a very traditional way with Standing Orders that were written hundreds of years ago. They do not encourage transparency or confidence in the system, because they allow some people to have too much power. The tax law and the tax codes have much the same problem. Some of them are far too old, and they have been tinkered with rather than changed wholesale. They encourage and allow some people who are in receipt of millions of pounds to continue to have millions of pounds without paying appropriate tax on it, whereas the people at the bottom cannot do so. One of the problems with the system is that nobody has confidence in it. Criminals have worked out how to get around it, and they continue to do so. The people at the bottom of the pile, who are not involved in those tax affairs and who do not see the criminal proceeds, do not have confidence in the system either.
The Government have a real job of work to do if they are to ensure that Bills such as this restore confidence in our tax and regulatory systems. My hon. Friend the Member for Dumfries and Galloway talked about the free market economy in America and some of the moves that that country has made. If we were to introduce similar financial regulation for banking and property ownership, not only in and around London but for those who own vast swathes of land in the Scottish highlands, we would inspire confidence among the general public.
The right hon. Member for Barking (Dame Margaret Hodge) and my hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry) mentioned the recent YouGov poll, and they talked about public confidence in these measures and public concern about tax evasion, particularly in the Crown dependencies. Because such tax evasion has been widely reported in the news, the public are really concerned about it. Their concern is increased by the fact that the Government have not used the Bill to introduce a public beneficial ownership register, and they have not given Parliament a timetable for introducing such a register. The quicker the Government can publish such a timetable, the better for the confidence of the general public in the tax system. As my hon. Friend the Member for Dumfries and Galloway has said, we are generally supportive of some of the measures in the Bill, but it does not go far enough to inspire public confidence in the measures that the Government are taking.

Roger Mullin: Many people in the Chamber consider much of the Bill to be praiseworthy. It struck me that all the critical  speeches this afternoon—spanning all parties represented by the Members who have spoken—have been about what is not in the Bill, rather than what is in it. I wondered who would put the Bill in the context of the challenge that we face, and I think the Minister did that best in his opening remarks. He said of the extent of the criminality that he discovered on becoming a Minister that
“it…takes my breath away.”
The extent to which the Bill will deal with such criminality does not quite take the breath away.
I would like to comment on three areas that have been mentioned, the first of which is the permissive culture of banks. The best critique of that culture has come not from me or from anybody who is currently in the Chamber, but from the right hon. and learned Member for Rushcliffe (Mr Clarke) on 24 May this year. When talking about this forthcoming Bill, he commented:
“we in this country are very bad at dealing with white-collar crime, and there is growing awareness of that. If someone wishes to rob a bank, they go to the LIBOR market; they do not put on a balaclava and pick up a shotgun—that is much less profitable.”
He very succinctly drew out the problem of how the culture in banks has created a context in which it is easier to commit grand crimes in them than it is for the old-fashioned external robber to do so. He went on:
“London is still the money-laundering capital of the world. For an African despot or a serious international criminal, London is the best place to put their money, because they can trust the bankers to look after it and not to steal it from them.”
He concluded:
“I hope we will also impose a duty on those at the head of the institutions involved to ensure that they take positive steps to stop those working for them encouraging such activities.”—[Official Report, 24 May 2016; Vol. 611, c. 450.]
I doubt whether anybody in this debate would disagree with the right hon. and learned Gentleman’s words in May, but I do not think that his optimism about the Bill is reflected by the reality of what we now face.
On banking, I suggest that the Minister look at two things. The right hon. Member for Barking, who is no longer in her place, gave the example of what happened in HSBC, where someone was willing to speak up but was then pilloried by senior management. One thing I would suggest to the Minister that needs doing is to strengthen protection for whistleblowing in the banking and financial sector. If we could find a mechanism to encourage people to speak up about criminality or bad practice, that in itself would be a useful measure. Many people have commented that the crisis in the banking sector in 2008 was not predominantly because of the details of regulation, but predominantly because of the culture at the top level. It was caused by group-think on the boards of banks, and by the over-confidence of individual chief executives who were immune to considering anything other than a dash for cash. The other thing I would suggest to the Minister is that it would be useful for a requirement for proper cultural analysis to be built into the banking sector.
The second area on which I want to comment has already been hinted at by my hon. Friends the Members for Dumfries and Galloway and for Aberdeen North (Kirsty Blackman), but no one else has talked about it in this debate thus far. It is the topic of Scottish limited partnerships. This may be new to some hon. Members, so I hope they will allow me to give a few examples.  Scottish limited partnerships are not a new phenomenon. They are not a devolved matter; they are a matter for this House. Although they were created by Asquith in the Budget of 1907—even I do not remember it—from 2008 they began to be used much more extensively for criminal behaviour. Since 2008, the use of SLPs has risen by approximately 40% year on year.
Scottish limited partnerships have been at the heart of some of the major corruption scandals in the world. For example, they have been named in major corruption scandals involving the former Soviet Union, particularly Ukraine, where they are still openly marketed as off-the-peg zero-tax offshore companies. Elsewhere, one Scottish limited partnership is at the moment at the heart of a $1 billion digital bootlegging case in the United States. The International Monetary Fund has warned that the risk posed by SLPs to the fight against money laundering and organised crime is something to which attention needs to be given. Other Scottish limited partnerships are involved in pornographic and even in paedophilia websites. Indeed, the span of criminal activity through these financial vehicles seems to know absolutely no bounds.
Closer to home, The Herald newspaper, which has done extraordinary work in this area, revealed barely six days ago that the tax haven bank owned by Lord Ashcroft is being used, without his permission, as a base to set up dozens of firms utilising SLP loopholes linked to a known fraudster. Indeed, two Belize companies have been falsely using the address of the HQ of Lord Ashcroft’s bank for at least six years. Those secret Belizean businesses, Sherbrook Assets and Whitmoore Solutions, have formed at least 70 other Scottish entities, most of them registered, I am sorry to say, to a convicted fraudster who lives in Fife in Scotland, Anzelika Young. The Bill should be ensuring that every SLP, along with any similar financial vehicle elsewhere in the UK, is exposed to rigorous due diligence at the very least.
During proceedings on the recent Finance Bill, I attempted to add a very simple new clause calling on the Government to investigate SLPs. They chose to vote that new clause down. When, subsequently, yet more criminal activity came to light, on 26 September I wrote to the Chancellor—I have a copy of the letter with me—seeking a meeting about this major international criminal activity. As of last week, when I was yet again chasing this up, the only response I have had—this is after a month, showing the Government’s lack of concern about international criminal activity—is that they are still considering how to respond to my request for a meeting. It is quite inappropriate for a Member of this House seeking a meeting about a major criminal activity to have to wait a month for any response.

Ben Wallace: I reassure the hon. Gentleman, given our meeting yesterday, that I have listened to what he said. I will meet my ministerial colleagues to discuss the problem he raised with me and see what we can do about it.

Roger Mullin: I am particularly grateful to the Minister for that clarity. Indeed, in coming to the Dispatch Box at that moment he confirmed what I was about to say in my closing line on the issue of SLPs. Given how he has discussed this matter with those of us on the Opposition Benches who are interested in it, and his understandable and quite appropriate concern about the matters raised,  I was going to suggest that the Prime Minister could appoint him the formal tutor for all Treasury Ministers, in addition to his role as Minister for Security; I am sure they would learn a great deal from the appropriate way he deals with matters. I commend that new appointment to the House. I speak in jest, but surely there is an issue here, as some of the Treasury Ministers who have been turning a blind eye for months need to learn that these are matters of great concern and importance, and deserve to be treated as such.
The third area I will briefly mention—and it will be very brief, as many Members have already commented on it—is what has been happening post Panama papers on Crown dependencies and the like. The clear view expressed in this debate is that the Bill does not yet go far enough, particularly on the much needed transparency and openness on beneficial ownership. If the Minister would be willing to think about how we might, in a collegiate way across the House, begin to address that issue and some of the others raised today, he will win himself many friends indeed.

Keith Vaz: It is a pleasure to follow the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) and listen very carefully to the important points he has had to make. I am glad he has had his meeting with the Minister and that promises have been made which I am sure he will ensure will be fulfilled.
It is a pleasure to speak in this debate, because one of the most important reports the Home Affairs Committee produced this year was that on the proceeds of crime. I am sorry to have missed the speech by the hon. Member for Wealden (Nusrat Ghani), who is a member of the Committee, but I am sure she spoke brilliantly about the conclusions of that report. I am grateful to the shadow Home Secretary for mentioning it and for the points she made concerning the practicalities and the issues it revealed.
The Minister did not mention the report, but I am sure he has read it. I am sure he has taken on board some of the points the Committee made. When seeking to legislate, it is important to first see where the problems are and where gaps exist, to listen to all those with experience—when we conducted the inquiry we did not just go to the usual suspects; many members of the private sector also gave evidence—and try to come to a conclusion that will provide the basis for sound legislation.
The Minister, who is newly appointed to his position in the Home Office, will have a pretty easy ride in respect of today’s proceedings, because I understand that there will be no vote. There is general support throughout the House for the measures the Government are proposing. They are the right measures and they are sound measures. They are designed to deal with the issues of criminality and terrorism. On those two issues, he will always find a House united. However, I hope he does not take that support as carte blanche to get the proposed legislation through in its entirety. I hope Members will table amendments in Committee based on the important points they have made today. I hope the hon. Members for Dumfries and Galloway (Richard Arkless) and for Aberdeen North (Kirsty Blackman), my hon. Friend the Member for Islwyn (Chris Evans) and others will table amendments relating to the important measures  they have put forward. In advance of her speech, I want to congratulate my hon. Friend the Member for Ealing Central and Acton (Dr Huq), who will be making her maiden Opposition Front-Bench speech on this important subject. More importantly, she will not be dividing the House, for which I think we are all very grateful.
The Bill identifies three priorities, which I will compare in turn to the findings of the Select Committee report published earlier this year. Robert Barrington, the director of Transparency International, says that every year over £100 billion might be laundered through the United Kingdom. That is equivalent to the GDP of Ukraine. A lot of that money goes through London, but as we are reminded by our colleagues from north of the border, other great financial centres, such as Edinburgh, are also used. Colleagues from Northern Ireland—we were having our own little debate as the main debate was going on—pointed out the particular difficulties they face, as Dublin is sometimes used by money launderers as an entry point to the EU. All those great financial centres are being used in this way, which is why it is right that action is taken, and taken immediately.
The Committee was shocked to find that poor supervision and enforcement in the London property investment market are making a safe haven for laundering and the proceeds of crime, a point made by the shadow Home Secretary. As we found out from the regulators themselves, it is far too easy for this to happen in a financial centre like London, which we believe—Edinburgh is, of course, respected—to be the greatest financial centre in the world. It is therefore essential to look at the markets here, how regulation operates, and try to deal with it in a constructive and positive way.
The hon. Member for Newark (Robert Jenrick) is not in his place, but he raised what I thought was a very important point about the necessity for resources. The Committee found that the private sector was using suspicious activity reports as a box-ticking exercise, sending in their information because it was their duty to do so. I was heartened by what the Minister said about the Government’s wish to cut through red tape so that information is sent on as quickly as possible.
Only 335 of the 1.2 million property transactions were deemed to be suspicious in 2015. The estate agents and their regulators were saying themselves that it was not possible to deal with all the complaints because there were so many of them.
We—Committees of this House, Members of Parliament —have made the point over a number of years that the assets and finances available to our law enforcement agencies cannot compare with the level of criminality in existence. Let us look at the budgets of the three main organisations dealing with this issue: the National Crime Agency has a budget of £450 million; the Financial Conduct Authority has a budget of £500 million; and the Serious Fraud Office has a budget of £45 million. However, the amount of criminal assets recovered has been very poor—only £155 million was recovered in 2014-15.
In defence of those three agencies, whose assets total about £1 billion a year, they say that it is not just about the recovery of assets—they are involved in other areas and they are part of other operations, which mean that the contribution that they make is not fully assessed.  However, if we just compare like for like, we will see quite a difference between what the budgets are and what is recovered.
I pay tribute to Lynne Owens, who has done a tremendous job as head of the NCA. The creation of the National Crime Agency was one of the legacies of the previous Home Secretary, now the Prime Minister. In fact, I am on record as saying that we had something of a revolution in policing in the six years when the Prime Minister was the Home Secretary. The whole of the Home Office was shaken up and new organisations and institutions came into existence. She stayed Home Secretary longer than any other Home Secretary since the last century. We cannot expect Home Secretaries to stay for ever—as with Chairs of Home Affairs Select Committees, there is always an end to the fun of doing these jobs. The fact remains that there are aspects that have not fully settled down, and one of them is the ability to give organisations the resources they need in order to finish the job.
Lynne Owens is doing a terrific job, as is her organisation, but I am extremely worried about the computer system that exists to do the very things that the Government want to do. I assume that the Policing Minister will be winding up this debate. When he does, he will, I hope, have the answer to the question I posed to the Minister for Security—the question has been posed over months and years—about when the ELMER system is going to be renewed. It is all very well saying that we want more information coming in but, if we look at the figures, we know that they just do not add up. This is an old and creaking system, designed to manage only 20,000 suspicious activity reports. On the basis of the last available figures, there were 381,882 suspicious activity reports, so how is a system designed to deal with 20,000 supposed to deal with 381,882?
The Minister seemed to be saying that people are ticking boxes and sending in information and they do not need to send in that information, but I do not think that we should expect the private sector to be involved in becoming officers of the law. It is similar to what we have seen over the last five years with landlords becoming immigration officers, as have people working for airlines when they check passports and tickets. Despite what immigration Ministers have said over a number of years, we do not have 100% immigration checks on exit. The airlines check, but no immigration officer checks a passport or a ticket on departure from our airports, which is very sad. That is a different story. My issue is that we cannot get staff in the private sector to act as enforcement officers; they are not trained to do so. That is why we need a new computer system.
When we asked the then Home Secretary—the present Prime Minister—about that, she had no answer to the question of who was going to pay the bill. Would the money come from the budget of the National Crime Agency? Would it come from the Home Office budget? That, I think, is crucial to ensuring that this legislation is properly resourced. Are we going to give the NCA and the Serious Fraud Office the equipment that will enable them to deal with these issues productively? I hope that the Minister will tell us when the new ELMER system will be established, because that is a fundamental issue when it comes to suspicious activity reports.
Another aspect of the Bill is the granting of powers allowing banks to close accounts. I believe that the threshold is too low, and that the Minister must look at  that, although it is really a Treasury issue. A number of my constituents have come to me—I know that this applies to other Members as well—and expressed concern after being told that their banks have closed their accounts. They are never given an explanation. Unfortunately, that has happened to too many members of the south Asian diaspora community, and, indeed, the African community. The Somali community was so concerned that representations were made to Treasury Ministers that, just because they happened to be Somali, their bank accounts had been closed. On Friday, I met someone from the Yemeni community who had been told that his bank account had been shut down in 28 days. He had been given no explanation, because banks are private organisations.
Obviously we do not want people to be told “By the way, we are closing your bank account because you are a terrorist” if inquiries are ongoing, but certain explanations need to be given. We need to be sure that the powers that we are granting are appropriate to the agencies to which we are granting them.

Charlie Elphicke: May I take up the issue of money laundering and the NCA? When I was a lawyer, one would do an ID check and then the information would be put in the bottom drawer, never to be seen again. If one were at all concerned, one would just do a “tipping off” and dump it on the authorities as a box-ticking exercise. There is no qualitative method of processing such information. Does the right hon. Gentleman agree that there should be such a method?

Keith Vaz: I think that, when it comes to the hon. Gentleman, it is probably a case of “once a lawyer, always a lawyer”. He is absolutely right. Training should be given to those who are involved in these activities, and in each organisation there should be a compliance officer who has received the necessary training. I do not know what kind of law the hon. Gentleman practised, but we would not expect every single lawyer to be trained to deal with issues such as SARs. We would expect a compliance officer in a big firm of solicitors to be able to do that, because there would not be the time to train everyone. However, I do not believe that that would cut the figure of 381,000 to 20,000. Faced with a third of a million SARs, even the best-trained lawyer—and I would put the hon. Gentleman among, probably, the best that one could find—would not be able to lower that figure. So as well as giving the private sector more responsibility to check, we need to ensure that the equipment is fit for purpose.
Let me commend the suggestion made to the inquiry by the outgoing Metropolitan Police Commissioner, Sir Bernard Hogan-Howe. I pay tribute to the excellent work that he did as commissioner. The hon. Member for Louth and Horncastle (Victoria Atkins) will remember that, when she was a member of the Home Affairs Committee—before she was poached by the Policing Minister to become his Parliamentary Private Sector; we used to train them well in the Select Committee— Sir Bernard came up with a suggestion that was very important in relation to those who were involved in criminal activity. I raised this point with the shadow Home Secretary, and I am grateful to her for saying that she would consider it. I hope that the Policing Minister will also consider it, because when it comes from someone as distinguished as the Metropolitan Police Commissioner it is worth looking at again.
Those Mr Bigs or Mrs Bigs who serve their sentence and come out of prison and still have not paid their compensation order are at an advantage. I agree with my constituency neighbour, the right hon. and learned Member for Harborough (Sir Edward Garnier), that we probably should not keep them in prison indefinitely, but there needs to be some sanction for them to pay up.
One of the issues that arose was that compensation orders were given for assets that probably did not exist. They sound like fabulous figures in court—“This criminal involved in mass criminal activity has millions and millions of pounds”—but actually they do not have those kinds of assets. We need to be realistic about what we are going to recover when we issue the compensation orders. However, there needs to be a penalty. We need to ensure that something is done so these people have to pay up before they come out of jail, otherwise they will simply use a sentence as an opportunity to be detained at Her Majesty’s pleasure and come out and have access to that money.
Finally, Mr Deputy Speaker—or should I say very finally? [Interruption.] I did not realise we were short of time; I thought this debate was ending at 7 o’clock.

Lindsay Hoyle: Order. There is not a shortage of time, but when the right hon. Gentleman says “Finally” I actually believe him.

Keith Vaz: Mr Deputy Speaker, after all these years how can you believe a Member when they say, “Finally”—how can you assume they are about to finish their speech? But this is very finally, in honour of you, Mr Deputy Speaker: when the Policing Minister replies, I want him to address the issue of the police funding formula.
We have been waiting for a long time for the new police funding formula to be decided upon. Every Member of this House has a constabulary. That includes you, Mr Deputy Speaker, and Lancashire was very vocal last year: its Chief Constable Finnigan said he was running out of money and the reserves were going to run out.
All the constabularies have been waiting for the Policing Minister to announce the arrival of the police funding formula. His predecessor told the House he could not give us the formula because Sara Thornton, head of the Association of Chief Police Officers, now the National Police Chiefs’ Council, was doing her analysis and we could not have a police funding formula until she had completed her work. I understand that that is not the case and that there is no reason why we cannot have the police funding formula.
Why do we need that to deal with the issues raised in the Bill? It is because it is not all about the City of London. This kind of activity happens all over the country and if we expect local police officers in Leicestershire, Lancashire, Kent, Sussex and throughout the country to be able to plan to deal with this issue, we need the formula. Therefore, I hope that, as well as telling us about ELMER, the Minister will give us the co-ordinates and the new date for the announcement of the police funding formula.

Rupa Huq: This is the first time that I have spoken from the Dispatch Box and I am pleased to find it accommodates even people of Rupa size.
I am pleased to be responding for the Opposition on the Criminal Finances Bill, which touches on issues that have been catapulted into the public eye with both the Panama papers scandal and the anti-corruption summit held here in May under the previous Prime Minister—how long ago that all seems now.
We have had a good debate today, which has strayed into the murky underworld of illicit finance, terrorism and international aid as well as home affairs, and we have had contributions from my right hon. Friends the Members for Barking (Dame Margaret Hodge) and for Leicester East (Keith Vaz), my hon. Friend the Member for Islwyn (Chris Evans), the right hon. and learned Member for Harborough (Sir Edward Garnier) and the hon. Members for Kingston and Surbiton (James Berry) and for Dumfries and Galloway (Richard Arkless) among others.
This Bill seeks to tackle money laundering and corruption, to recover the proceeds of crime and to counteract terrorist financing, all measures Labour supports. This seems like good news in a year in which that has been in short supply on many fronts, but we must temper our reasons to be cheerful by identifying certain omissions and sounding some notes of caution.
First, the green ticks. We welcome the eye-catching unexplained wealth orders, which would force individuals with assets way above their means to account for those possessions, which can now include jewellery and art work as well as property. The new seizure and forfeiture powers will mean that such assets can be frozen and possession of them can be taken. As a London MP, I am all too aware of genuine Londoners who want to get a foot on the property ladder, but the transactions involving the ill-gotten gains of gangsters are messing things up for those people and creating an over-heated property market.
We also commend the fact that the investigatory powers are being extended to politically exposed persons. A thumbs up, too, for the new offence of failure to prevent the facilitation of tax evasion being applied to corporations and regulatory bodies. We also applaud the improved data sharing between the private and public sectors, and the Government’s extension of disclosure orders to money laundering investigations, bringing them into line with corruption and fraud investigations. Also to be commended are the strengthened suspicious activity reports. The period of investigation used to be 31 days. I think that there will now be six extension periods, adding up to 186 extra days. We live in an age when terrorism is probably the biggest threat of our time, so we also welcome the extension of powers to include terrorists’ property and finances.
So, what’s not to like? We acknowledge the steps being taken to tighten the net on corrupt practice, and we shall not seek to divide the House this evening, but more could be done to end the status of the UK as a magnet for dirty money. There should be no safe havens, particularly in our own back yard, where the proceeds of international corruption often turn up. Taken as a package along with its overseas territories and Crown dependencies, the UK constitutes the most secretive tax jurisdiction in the world. That is not a record to be proud of. Good work has been done in the reports produced by the Public Accounts Committee and the  Home Affairs Committee, when they were chaired by my right hon. Friends the Members for Barking and for Leicester East, but not all their suggestions have been taken up. Many Members on both sides of the House have flagged up the fact that action must be taken on our overseas territories and Crown dependencies, and we argue that they need public registers of beneficial ownership. The British Virgin Islands and the Cayman Islands are among the worst offenders, and we administer them. We assert that this is the most gaping hole of all.
A trick has been missed. Applying transparency to those opaque corporate structures is a key part of the solution, but the Bill does not go there. We know that 75% of the corruption cases investigated by the Met police’s proceeds of corruption unit involve companies in secrecy jurisdictions, and that 78% of the companies involved are registered in the UK’s overseas territories or Crown dependencies. We need full transparency, but the Bill does not go far enough. A measure on the failure to prevent economic crime was trumpeted in May 2016, but it is missing from the Bill. Without some degree of transparency in company ownership, we cannot be completely aware of the scale of the problem or the damage that is being done. Kenya, Nigeria and Afghanistan have all conceded this point.
It has been pointed out that the people interpreting the rules need resources, and the weaponry that we use for crime-fighting could do with an update. The National Crime Agency will have more work to do, so the Bill will have cost implications in that regard. The agency is the successor to several bodies that have been merged. Notwithstanding the one-off cash injection that it received in the spending review, it needs consistency in its funding rather than just receiving one-off blockbuster sums. My right hon. Friend the Member for Leicester East eloquently made the point that there were serious question marks over the IT system designed to support the suspicious activity reports regime. It was originally designed to deal with some 20,000 cases, but, as he said, it is currently processing 381,882 of them. It is creaking at the seams. A new system was promised—I think its name is ELMER—and I again ask the Minister to tell us when we can expect it.

Keith Vaz: Will my hon. Friend give way?

Rupa Huq: Will it come off my time?

No.

Rupa Huq: Okay. Go ahead.

Keith Vaz: I can assure my hon. Friend that I would never want to reduce her time. I congratulate her on making an excellent maiden Front-Bench speech.
The delay in ELMER, and in the new system that the Government will want to put in place as technology moves on, will lead to more criminal activity. The quicker this is done, the better.

Eleanor Laing: I reassure the hon. Lady that she is quite safe in giving way during a winding-up speech. She has plenty of time. Indeed, she has until 10 minutes to 7, but she will know that the House would prefer that she does not take quite that long.

Rupa Huq: I am grateful to you, Madam Deputy Speaker, and to my right hon. Friend for his intervention. I will resist the temptation to sing, rap or recite poetry and will finish well before 10 minutes to 7.
My right hon. Friend makes a good point. We cannot fight modern cyber-wars with catapults. Technology changes and we need to upgrade this wholly inadequate system. We were told that that was happening; we want to know when.
New powers for the Serious Fraud Office are all well and good, but it needs officers with the right training. Since it was set up in 2009, it seems as though the public purse has been used to train officers in financial crime, yet we are simultaneously powerless to prevent them from falling prey to private sector poaching, so something needs to be done. There was to be a working group on the recruitment and retention of investigators—what became of that? Are some of those deficiencies to be plugged at a later stage?
At the moment, 27 separate bodies are responsible for asset recovery—people who investigate SARs—and they are often in the private sector and sometimes funded by the groups they regulate, so there is a mismatch. It would not be a bad idea to have an overall SAR tsar or tsarina to get some coherence. What progress is being made on the anti-corruption strategy due by the end of the year? I understand that a joint ministerial council will meet at the Foreign Office next week. Will tax issues be on the agenda? If the Minister does not know, will he have a word with his friends in the Foreign Office to find out? If it is not on the agenda, can I politely suggest that it be added urgently?
What are the Government doing to ensure transparency in our overseas territories and Crown dependencies? What is the plan? My right hon. Friend the Member for Barking suggested that the Government could at least set a timetable to allow them time to adjust. In the meantime, will the Government give them every support to transition their business? They have propped up this business model for a long time and they need to move away from facilitating corruption. Without action in our tax havens, the small bits of good news in the Bill will be overshadowed by the Government’s failure to act. The Government should be able to persuade their own territories to follow their lead. Members on both sides of the House paid tribute to the former Prime Minister and his ambitions in this area.
We need to get away from the idea that not paying tax, whether by avoidance or evasion, is a victimless crime. Countries in the developing world lose three times as much to tax havens through illicit funds and re-laundering than they gain in aid. It adds up to a trillion pounds a year and we are pumping aid into these places at the same time—it makes no sense. Given our straitened circumstances, we should be justifying every pound spent, but HMRC estimates the tax gap to be £36 billion, including £5.2 billion owed to our Exchequer from tax evasion. My right hon. Friend the Member for Barking quoted the same figures, but other interest groups say that they are conservative estimates. By definition, secret transactions and hidden money mean that we do not really know the true extent of this. For that £5.2 billion, we could get 42,000 full-time doctors or 54,054 nurses a year. As my right hon. Friend the Member for Leicester East pointed out, we have a poor record of recovering costs, and these things do not pay for themselves.
The practices that this Bill seeks to tackle expose the dark side of globalisation, its links to terrorism, and the way global financial cross-border crime, terrorism and all these things can be done nowadays at the click of a mouse, meaning that illicit funds can fuel a golden age of money laundering. That is entirely possible and we do not want it to happen. We do not want illicit funds to finance terrorist operations, aided and abetted by financial secrecy jurisdictions of our own.
Governments can hold all the summits they like and people can orate good intentions, but warm words need to be matched with action. This Bill is a case of “could do better” on the Government’s report card, and I urge them to work together with us. In Committee, we will be pressing the Government on some of the issues outlined today—and more. When the opportunity for reform presents itself, the Government will surely not want to go down as having bottled it. We will not oppose this Bill on Second Reading, and we look forward to contributing constructively to its passage through Parliament.

Brandon Lewis: I thank right hon. and hon. Members for this informed and valuable debate. We have heard strong and important contributions, and there has been support from both sides of the House for the principles behind the Bill. We will have interesting and strong discussions in Committee.
As my hon. Friend the Minister for Security emphasised at the start of the debate, there can be no doubt about the seriousness of the threats of terrorism and organised crime, or about the scale of the challenge that we face in combating them. As of July last year, about 5,800 organised crime groups were operating in the UK. Fraud due to organised crime is thought to cost this country about £9 billion, and the social and economic costs of illegal drug supplies are estimated to be some £10.7 billion a year. As has been said, these are not faceless, victimless crimes; they have an impact on people we know and those who live in our constituencies.
As we have heard, the UK is a fantastic place to do business, and the Government want to maintain that. We want to send out a clear message across the country that we are open for business, but if we are to maintain our position, we must ensure that this is one of the cleanest and safest places to invest. We need to send a message to those who would seek to corrupt legitimate trade.
I am grateful to all right hon. and hon. Members who have contributed to the debate, and I particularly welcome the hon. Member for Ealing Central and Acton (Dr Huq) to her Front-Bench role. I also welcome the hon. Members for Dumfries and Galloway (Richard Arkless) and for Kirkcaldy and Cowdenbeath (Roger Mullin) to their roles. I was pleased to hear that the Minister for Security has had the opportunity to discuss the Bill with the official Opposition and Scottish National party Members prior to the debate—indeed, some of the paperwork was shared some two months ago—and I know that we will continue that conversation during the passage of the Bill.
It is clear that Members on both sides of the House want to contribute to make sure that we end up with a robust, strong system of which this country will be proud. Almost without exception, hon. Members who  have spoken have understood the importance of these powers and been supportive of the Bill. Of course, it is right that on such issues as money laundering and terrorist finance, the House should present a united front, as it is doing on the principle behind the Bill. I welcome the fact that in our consultation on the Bill, a diverse group of stakeholders—ranging from the major banks, which have been mentioned today, to law enforcement investigators, prosecutors and civil society groups—have given an overwhelmingly positive response to its provisions.

Mark Field: I apologise that I was not able to contribute to the debate itself. I am afraid that I am a veteran of the consideration of the Bill that became the Proceeds of Crime Act 2002. Although I accept that there is a great deal of unity regarding some of this Bill’s provisions, the real issue is how enforceable those provisions are. It is important that the Bill is scrutinised very carefully in Committee because there is a danger that although we will put on to the statute book a lot of new laws, some of which might be regarded as rather draconian, they will not be properly enforced by the police, or will be ruled out by the judiciary when matters come to court. That is the one caveat I would set out, although it is right to say that these powers are important, especially the new ones in relation to counter-terrorism, which were not envisaged at the time of the 2002 Act.

Brandon Lewis: My right hon. Friend makes an important point, particularly by outlining the importance of the Bill’s Committee stage to ensure that Members have a chance to have an input into the debate, as indeed they have had this afternoon. He should have great faith in my hon. Friend the Minister for Security, who is determined to work with colleagues to ensure that the Bill is robust. The Bill gives a clear message to those who want to try to usurp our system that that will not continue—we will not allow it. Although we are a country that is open for business, we are also a country that believes in fairness and that will ensure that fairness prevails.
A couple of core issues have been raised by a number of Members, particularly about the overseas territories. We heard speeches from the right hon. Member for Barking (Dame Margaret Hodge), and the former Chair of the Home Affairs Committee, the right hon. Member for Leicester East (Keith Vaz). We have agreed that UK law enforcement and tax authorities will have, in real time, unrestricted and secure access to things such as the beneficial ownership initiative, and information about corporate and legal entities incorporated in the overseas territories and the Crown dependencies.
The right hon. Lady outlined the excellent work of David Cameron and the strong message that he gave when he was Prime Minister. This is something that the current Prime Minister is determined to continue. We will ensure that there is an end to people usurping the law. It is important that we work closely with our colleagues around the world to ensure that we have a strong and robust system. We have taken a lead on this. Those territories have agreed that they must commit to new global standards in tax transparency so that Her Majesty’s Revenue and Customs can investigate any untoward activity. As a result, later this year, HMRC  will have new data on billions of pounds of accounts held in the overseas territories by UK taxpayers. This is a big step forward. I know that we as a Government are determined to ensure that we stamp out that kind of behaviour.
Funding was mentioned by a number of Members, including the right hon. Member for Leicester East. The NCA’s funding has increased from £448 million to nearly £478 million over the past year and police budgets have been protected. Funding for HMRC has also increased—up to £3.6 billion, with the £241 million input that was mentioned earlier.
I can be clear that we are determined to ensure that the police and the NCA have the resources that they need to be able to look at all this in the round, including IT issues. The right hon. Gentleman suggested that I use the debate to discuss the police funding formula, but he will have to excuse me for resisting that temptation for now. Over the past few weeks, I have written to all chief constables and police and crime commissioners to ask them to come to talk to me as we seek to deliver our election manifesto commitment of a fair funding formula for police, which we will do.
In response to comments about the overseas territories and Crown dependencies, I am pleased to announce that the British Virgin Islands and the Turks and Caicos Islands have just—conveniently, as I am here at the Dispatch Box this afternoon—committed themselves to the initiative on beneficial ownership, which many hon. Members have spoken about today. All the overseas territories have now agreed to have central registries, which will be accessible to law enforcement authorities. We will continue to push for all countries to introduce public registers. This is good news, and we will continue to work on it.

Richard Arkless: Clearly, I am delighted to hear the good news that the Minister has just given. Can he confirm whether his announcement confirms that those registers will be published?

Brandon Lewis: As I said just before the hon. Gentleman intervened, we will continue to push for all countries to introduce public registers. This is a step in the right direction. I welcome it, and we acknowledge that we want to continue to work on this. Another issue raised by his good self, as well as the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) and others, was about Scottish limited partnerships. I hope that they will take into account the fact that my hon. Friend the Minister for Security intervened to say that we want to work on that with colleagues across Parliament. We have very much taken those points on board.
My right hon. and learned Friend the Member for Harborough (Sir Edward Garnier) and my hon. Friends the Members for Kingston and Surbiton (James Berry) and for Wealden (Nusrat Ghani) spoke passionately and made incisive contributions. In particular, my hon. Friend the Member for Wealden outlined the Bill’s importance given the part that it will play in ensuring that we fight the funding of extremism. We have discussed the Bill’s vital importance in protecting the UK’s position and status as a global financial centre and in ensuring that criminals cannot benefit from the proceeds of their crimes. I expect and hope that right hon. and hon. Members will want to give in-depth scrutiny to the Bill,  as they have suggested this afternoon, as we move on to clause-by-clause examination in Committee, and I look forward to a lively debate on its provisions.
I am proud that, by comparison to most European countries, we are positioned high in the league table for having a strong and independent judiciary, as well as a determined law enforcement environment. If we are to maintain our record and position, we always need to stay one step ahead of those who seek to undermine our attempts, especially in such a fast-moving global environment. That is why the Bill is so important, why it is reassuring that it has received principled, cross-party support in the House, as that sends a clear message, and why we must ensure that law enforcement agencies have the powers they need to combat the ability of criminals to launder the proceeds of their crimes, as well as to tackle terrorism financing and to bring more offenders to justice. I hope that the House will agree that that is in the public interest and that the Bill should be passed at the earliest opportunity with clear, continued cross-party support. On that basis, I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.

Criminal Finances Bill (PROGRAMME)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Criminal Finances Bill:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Thursday 24 November 2016.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Proceedings on Consideration and up to and including Third Reading
(4) Proceedings on Consideration and any proceedings in legislative grand committee shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
(7) Any other proceedings on the Bill (including any proceedings on consideration of Lords Amendments or on any further messages from the Lords) may be programmed.—(Andrew Griffiths.)
Question agreed to.

Criminal Finances Bill (MONEY)

Queen’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Criminal Finances Bill, it is expedient to authorise—
(1) the payment out of money provided by Parliament of—
(a) any expenditure incurred under or by virtue of the Act by a Minister of the Crown or a government department; and
(b) any increase attributable to the Act in the sums payable under any other Act out of money so provided; and
(2) the payment of sums into the Consolidated Fund.—(Mel Stride.)
Question agreed to.

BUSINESS WITHOUT DEBATE

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Electricity

That the draft Contracts for Difference (Allocation) (Amendment) Regulations 2016, which were laid before this House on 6 September, be approved.—(Mel Stride.)
Question agreed to.
Motion made, and Question put forthwith (Standing Order No. 118(6)),

Banks and Banking

That the draft Financial Services and Markets Act 2000 (Ring-fenced Bodies, Core Activities, Excluded Activities and Prohibitions) (Amendment) Order 2016, which was laid before this House on 21 July, be approved.—(Mel Stride.)
Question agreed to.

PETITION - IMPLEMENTATION OF THE 1995 AND 2011 PENSIONS ACTS

Phil Boswell: I am delighted to have this opportunity to present this petition to the House. It calls for fair transitional arrangements for 1950s-born women who are affected by changes—[Interruption.]

Eleanor Laing: Order. Mr Boswell is speaking and other people should not be making a noise in the Chamber while he is doing so. If Members wish to leave, they should do so swiftly and quietly.

Phil Boswell: Thank you, Madam Deputy Speaker.
Women born in the 1950s who are affected by changes to the state pension age are surely bearing an unfair burden. When the Pensions Act 2011 was debated, Ministers promised transitional arrangements to ease the burden, but those arrangements have not materialised, leaving women in my constituency—Coatbridge, Chryston and Bellshill—and many others facing hardship. I thank all those who have signed the petition and those in similar terms presented by other hon. Members. I also thank the Journal Office for its work in this respect.
The petition states:
The petition of residents of constituency of Coatbridge, Chryston and Bellshill,
Declares that as a result of the way in which the 1995 Pensions Act and the 2011 Pensions Act were implemented, women born in the 1950s (on or after 6 April 1951) have unfairly borne the burden of the increase to the State Pension Age; further that hundreds of thousands of women have had significant changes imposed upon them with little or no personal notice; further that  implementation took place faster than promised; further that this gave no time to make alternative pension plans; and further that retirement plans have been shattered with devastating consequences.
The petitioners therefore request that the House of Commons urges the Government to make fair transitional arrangements for all women born in the 1950s (on or after 6 April 1951) who have unfairly borne the burden of the increase to the State Pension Age.
And the petitioners remain, etc.
[P001965]

VETERANS CARE SECTOR: GOVERNMENT ROLE

Motion made, and Question proposed, That this House do now adjourn.—(Andrew Griffiths.)

Johnny Mercer: Thank you very much, Madam Deputy Speaker, for granting me this debate.
I know that this is a persistent cause of mine, and sometimes I feel that I should apologise to the Minister for bringing him to the House to discuss his portfolio. I want to say from the outset how impressed I and many others in this sector are by his personal commitment to this agenda, and my comments are in no way directed at him or any of his staff who work hard to try and tackle the challenge of veterans care within the envelope that he has been given by the Secretary of State for Defence and the Prime Minister.
It is not easy. The political world is chaotic at present and priorities are hard to define, but the truth is that in this sector the challenge of closing the gap between what we say so promisingly at the Dispatch Box and how it feels to the men and women who serve increases in severity the longer we leave it. The landscape is clear, with ever increasing demand—an ongoing cost, as it were—resulting from the recent campaigns that this country has undertaken in Iraq and Afghanistan, set against a declining interest in this agenda, both from the wonderful people of this country who have carried the torch valiantly in recent years, but who are experiencing battle fatigue now that operations have faded from view and, I regret to say, from Government too.
Let me expand my argument. In January last year, I met the previous Prime Minister and presented a report that for the first time had almost universal support across the veterans care sector. It examined a sustainable veterans care model so that the United Kingdom could do its duty by those who serve. I also presented the report to the Secretary of State for Defence and others.
The paper was not my solution but that of many people involved in the arena: serving, retired, and third sector. It was our voice, and I was proud of it. It was greeted with warm words and encouraging lines about duty and responsibility, with a promise of a response, but regrettably, after a while, nothing materialised at all.

Michael Tomlinson: I congratulate my hon. Friend on securing this debate, and on all he does in this field. Having looked at the paper, I recommend its proposal on having a single point of contact. May I invite him to read another paper on the armed forces community health and wellbeing team for Dorset by Andy Gritt, and see how it fits with his model?

Johnny Mercer: Absolutely; I should be delighted to have a look at that.
In the current political landscape, I fear that the can of veterans care has received another good punt down the road in the wake of Brexit. I strongly welcome and support the new Prime Minster, who is supremely equipped to tackle a job which, from my position, looks almost impossible—that of managing my party and granulating the United Kingdom’s exit from the European Union.  I could not wish her more strength to her arm in these challenges, and I will support her to a fault, as she well knows. I believe that we achieve nothing on our own in politics, and the strength to tackle the challenges ahead is in the team on the Conservative Benches.
However, I must confess myself to be disappointed at first sight on this single issue.In July I challenged the Prime Minister in the leadership campaign, in front of my entire party, about her commitment to this agenda and her willingness to look at a new Government Department—or something similar—to finally match our words with our deeds when it comes to the 2.6 million veterans in this country.Her response was that she was not keen to restructure Government and create any new Departments beyond a Department for Exiting the European Union, which I entirely understood. The House can imagine my concerns over the summer about where veterans care ranked on her agenda, as she subsequently re-ordered Government to face the challenges ahead which, as I mention frequently, I entirely support, but she chose not to include this cause too.
I was further concerned that the veterans care agenda was being diluted when the Under-Secretary of State for Defence, my hon. Friend the Member for Milton Keynes North (Mark Lancaster), had his veterans care duties spread even more thinly with the addition of the reserves brief to his work—an increasingly enormous challenge as the military reconfigures its relationship with the reserves heading into 2020. For me this was a clear movement in the opposite direction to that which we were pursuing, which did not go unnoticed by those who strive to deliver this country’s duty to those who serve.
That is the current position—ever-increasing demand, a general and understandable decline in interest in this agenda now that the wounds of war are not visible on those flying back from Iraq or Afghanistan every week, and a Government challenged by unprecedented political demands.

Simon Hoare: I note what my hon. Friend says about the fading of memory, but when my constituent Robert de Ferry Foster came to see me at an advice surgery the other week, it was clear that the legacy of the injuries he sustained in Iraq are with him every day. He talked about sustainability, which my hon. Friend has spoken about as well, but he also spoke about the need for simplicity—a simple, transparent system for those who have served and sustained potentially life-threatening and very life-impacting injuries. They need a far simpler way of gathering the support and help to which they are legitimately entitled.

Johnny Mercer: I entirely agree, and I will come to the four principles, of which that is one, that should underlie veterans care. It is not a case of veterans being entitled to that care; we owe it to them and we must deliver it.
That is why I seek leave again to challenge the Minister on the Floor of the House and to challenge this Government to fulfil their duty to those who do our bidding from this House. I know that it can be a little tedious watching or listening to me keeping on about this agenda. I am not naive about that, but I cannot stop. I do not do it because I have nothing else to do. I do not do it because there are particularly good career prospects in this line of work, or because there is some  sort of intangible crowd that I am playing to out there. I do it for the one simple thing that drove so many of us in the past decade and a half to conduct unpopular wars on this nation’s behalf, miles from home and often from the public eye.
I refer to that one word which I remember compelling the marine at the front of my patrol to do his duty, refusing any relief from those duties—in his case seeking out improvised explosive devices day after day for seven long months. I refer to that thing which makes a young officer calmly accept his fate with the words, “Lads, I’m going down,” rather than lose his composure in the heat of battle as he died in front of his men. I do not seek to lecture my esteemed colleagues in Government, but it is myduty to those men to keep up this fight, and the sacrifice I make in doing this is so entirely insignificant compared to theirs that I feel I must keep going until we match what we say as a Government from that Dispatch Box with what itfeels likefor our men and women who serve.
I applaud the Government’s efforts on this agenda, but they are not enough— nowhere near enough.I have no doubt that this Minster and his staff work night and day trying to deliver this agenda, but he can only work with the resource and priorities that he is given by the Secretary of State for Defence and the Prime Minister.

Luciana Berger: I congratulate the hon. Gentleman on securing this incredibly important debate. I know that he shares my concerns about the mental health of veterans. Does he also share my specific concern about the availability of specialist mental health services for our veterans, which we know are particularly patchy in some parts of the country, exacerbating many of the challenges that we know our veterans face?

Johnny Mercer: Absolutely—I completely agree. On mental health, we have moved so far away from getting involved, getting our hands dirty and sorting this out that we are now in danger of being in a place where the perception is that everybody who leaves the armed forces has some form of post-traumatic stress disorder, and that is wildly inaccurate. We need to provide these services for those who need them, professionalise the standard, and take far more of an interest than we have done.
Given his current operating envelope, the Minister has achieved some significant things. Let us take, for example, his work in the healthcare arena for service personnel and veterans with complex care needs. The scheme he announced in July, assuming that the pilot is successful, could fundamentally change the way in which care for our most seriously injured is commissioned, easing the pressure on local clinical commissioning groups and retaining the knowledge and expertise within Defence for those who have been injured. This is the future—a first step. I urge the Prime Minister to note the early successes of this scheme and look to roll it out nationwide.
I plead with the Minister and his Department not to take my observations personally. He conducts valuable work, but it is my job to speak truth to power from these Benches, and I would be failing in my job if I were not to do so.What is the truth? I think it is the evidence. The evidence on this is not the endless announcements  about what we have put into the sector. These announcements are clearly to be welcomed, although I cannot help but feel that they play somewhat to a home crowd. The evidence is how what we do affects and matters to those whom we are trying to help. I have said for a long time that until we fundamentally change this conversation from talking about what we are endlessly pouring into this sector to how it actually feels to be a veteran in the United Kingdom in 2016, we will never truly understand the scale of the work to be done.
I would say to the Secretary of State for Defence and to the Prime Minister that the evidence is there if we were only to look. For example, a study done by SSAFA just before the summer recess indicated that 85% of veterans feel that the UK Government do not support them well enough, while 84% believed that the much heralded armed forces covenant was not being implemented at all. Almost half the people in the armed forces surveyed in the study—the very people we are trying to help—had not even heard of the armed forces covenant. The gap between how we think this is being implemented as a policy and how it is really being implemented is so great that I hesitate to air it in public. It is a lottery of choice as to where local authorities or others choose to implement it, and that currently dictates whether the military covenant is a reality for our servicemen and women. It has become a catch-all phrase in this place and No. 10 that is becoming—I hesitate to say it— increasingly meaninglessto the service community, and that will continue unless we stop this trend. I say this as someone who last week privately met the previous Prime Minster—a good man who genuinely “got” the military in this country—and could tell that he has genuine pride in his achievements with this policy. However, the gap between the top and the reality on the ground is vast.
I reference one study for evidence. In truth, there are many, for in this country we have been blessed for some time by a public and a third sector that has done wonders for our armed forces veterans over the years. Of the thousands who work in the sector—who do so for little reward but in the same vein as that duty of which I spoke earlier—I want to mention one couple who have left the sector in recent months, leaving their indelible mark, and the conversations around veterans care in the United Kingdom forever changed. Bryn Parry and his wife Emma set up Help for Heroes in 2007 as a result of the catastrophic consequences of a criminal dereliction of veterans care by the United Kingdom Government in the aftermath of the early days of Iraq and Afghanistan.The third sector presents its challenges as much as any other sector. It is a congested market, competing for the same funding, with people trying their best to do what they think is right for our armed forces veterans. We will hear good and bad of every organisation, but the truth is that Help for Heroes has completely and fundamentally changed the way in which veterans care happens in this country today.
Like any success story, Help for Heroes has its detractors, and I am not naive about this, but I will never countenance them, I am afraid. I am from that generation who had nowhere else to go in 2005 for veterans care. Help for Heroes grew faster than any similar organisation in  history, but did the thing that so many, I regret to say, neglect—retained its focus on those whom this is all about: the guys and the girls. Bryn and Emma, you have now passed your torch to your successors, but your light will never go out. From a generation of soldiers who felt that no one really cared once the battle finished, I want to say thank you from the bottom of our hearts for everything you did. You committed your lives to this pursuit, delivered extraordinary change and services, and I shiver to think where we would be without you.

Amanda Milling: Yesterday, volunteers from Help a Squaddie Find a Home in Rugeley visited Parliament. Will my hon. Friend join me in congratulating them on their hard work, and does he agree that the responsibility to support veterans to integrate back into civilian life and to ensure that they do not find themselves homeless is critical?

Johnny Mercer: I do, and I commend the work of some of the brilliant charities that we have in this country; as I have said, I shiver to think where we would be without them. I think that it is a fundamental duty of Government to ensure that that care is available. We have a duty to these people. I do not think that we should deliver it, but we need to ensure that they are looked after. What is happening is not good enough. The Americans realised that after Vietnam. We need to catch up with the programme and make sure that care is delivered.

Will Quince: My hon. Friend is making an incredibly powerful speech. I am very proud to represent the garrison town of Colchester, and I know too well the fantastic charities that work in this sector. As we withdraw from theatres of operation, we will inevitably have a peace dividend. Does he agree that this is the time that we should invest money to support our veterans?

Johnny Mercer: I thank my hon. Friend for his intervention and absolutely support what he says. We are reaching a point where demand is going up and the mindset of war is declining, and the moneys are in decline as well. If we do not get this right now, it will be far too late to do so in 2020.

Rebecca Pow: My hon. Friend is making a very passionate case, as always. Go Commando, a charity in Taunton Deane, does great work to support not only veterans, but their families, which is so important. Initiatives such as children’s centres, holiday vouchers, days out and the provision of emotional and practical help could be very good models for the Government to incorporate into all the things that my hon. Friend is suggesting.

Johnny Mercer: Absolutely. I thank my hon. Friend for her intervention. We are not asking for the moon on a stick; there are some brilliant practices out there—not only in this country, but internationally—that we could learn from quickly. The services are there, but the Government have a job to do to bring everything together.
The third sector remains deeply challenging, and that is the reason for this debate. There are almost 2,500 military charities and funds in the UK today. Okay, many are regimental or sub-unit funds that are not in day-to-day  use, but that figure gives a picture of the chaos. I would not have called this debate if I thought that every single one of those charities was doing good. This is an awkward conversation, but if we did not have it we would be doing a disservice to those whom we are trying to help.
Some charities struggle with financial management; some are plainly criminal. Some practise evidence-based therapies or treatments; some are a vehicle to further their own unproven treatments, however well-meaning they may be. Some are run professionally, with complaints structures and staff management routines; others are a disaster.
We must now sort out that problem, for as time goes on the Iraq and Afghanistan generation of warriors will fade from memory. We will be on the same pages as the Falklands and the Gulf war, and in the same chapter as the Americans in Vietnam. Moreover, the public will stop giving, and understandably so. The income of some of our major charities is down by a third this financial year. No organisation can sustain that. The LIBOR funding that has sustained us for so long will eventually run out. Yet the duty to our veterans will only increase as the scars of our recent wars reveal themselves in communities up and down this land. Referrals to Combat Stress are up 71%.
Now is the time to have this fight—this dirty fight—of sorting out the third sector. I cannot help feeling that most of the sector would thank us for it. They loathe the criminal charities as much as I do, and they feel as sick as I do when, as they struggle like everyone else, unproven methods or groups attract Government funding. They curse the lack of a common needs assessment, which means that they have to start each case from scratch, causing more trauma to the individual using their services. If we do not have this fight—the Government are the only ones who can do it—it will look like we do not care and do not want to have this conversation because it is too difficult, too dirty, for us to get involved.
I am afraid that this comes back to what I discussed at the beginning, namely duty. This Government have a duty, not to always deliver, for the charities do that better than we ever could, but to ensure the provision of veterans care in this country. That includes ensuring that it is accessible to all, particularly our most vulnerable communities, perhaps through a single point of contact; too many have no idea how to access some of the brilliant services provided by our third sector. It also means ensuring that the care is of a standard and safety applicable to those who have served—and, indeed, to any other UK citizen—and that it is evidence based and correctly staffed by qualified personnel. We also need to ensure that cases are managed and individuals guided through the enormously complex treatment pathways, and that the great British public, who have carried this torch for so long, do not get ripped off by individuals raising money for a cause to which they will never stop giving.

Flick Drummond: My hon. Friend is making a powerful speech. Does he agree that it is vital that services are set up before veterans leave the forces? In particular, it is not good enough to have veterans scrambling for social housing in the days just after they have left the forces, as has happened in some of the cases I have come across.

Johnny Mercer: I agree. Some sort of education before people leave would be helpful, and I understand that some work has been done. I agree that any sort of direction through this pathway is strongly to be welcomed.
Why do we have to do this? I ask you, Madam Deputy Speaker, to put yourself in the shoes of the average user—a corporal who is two or three years out. He gave the best years of his life to the service of this country, willingly. Now, in a civilian job, he starts to find his past a challenge to deal with. We have all seen someone like him in our constituencies, up and down this land. He does not want sympathy; when the bell came, he was proud to serve this nation of ours. He just wants to know where to go. He does not want to have to re-tell his story all the time. His wife wants to know that the course he is doing is safe, that he will be looked after and that his treatment has a fair chance of working. She wants to know that someone will be managing his case, taking an interest and encouraging him through the process. Crucially, she wants to know that he will get that help in a timely manner before his condition deteriorates and becomes so much harder and so much more costly to treat.

Ruth Smeeth: I congratulate the hon. Gentleman on securing such an important debate. Does he agree that we should use the armed forces covenant as an opportunity, and that it should be more than just talk? In places such as Staffordshire, with the relocation of regiments from Germany to Stafford, that would allow us to think about how we can help veterans over the next 10, 20 or 30 years—both now and when they retire—so that they can build families and homes without having to worry about some of the issues that he is raising.

Johnny Mercer: My view on the armed forces covenant is that it is a great policy and, if implemented, it could work. The trouble is that, as I alluded to earlier, it is a complete lottery. I have seen it done well and I have seen it done appallingly, and there is no accountability at all. I hate to talk about it becoming meaningless but, ultimately, unless it means something, it is just another phrase. It can be a bit of a “get out of jail free” card for those who talk about the matter from the Dispatch Box, and that is what I want to change.

Jack Lopresti: I pay tribute to my hon. Friend for his work on the veterans sector and for making a brilliant speech. Does he accept that the military covenant has made a huge difference to veterans’ lives since its inception and since it was enshrined in law? I agree that there has to be a better way of co-ordinating charities, and perhaps a centralised access point and standards across the board, but I would not dismiss what the military covenant has achieved thus far, even though there is always work to do.

Johnny Mercer: I agree with my hon. Friend, but I refer him to the evidence that I presented earlier: 85%—quite a significant proportion—of veterans do not believe that that is the case at the moment.
In looking at all this, I really struggle to put my finger on why any of it is so desperately hard for the Government to achieve. Nobody else is going to do it. The third  sector cannot compel faux charities to cease. It cannot compel others to agree to a single point of contact or a common needs assessment. The issue needs leadership. It needs a small but strong Department with a Cabinet Minister whose single duty and career stands and falls on veterans care. It needs the Government to make the shift from talking a very good game on this agenda to actually delivering it. It needs a game-changing event such as Help for Heroes provided in 2007. It is in the Prime Minister’s gift to do this, and I again plead with her to listen this evening. There are always reasons not to do this, and I have heard them all, but they do not wash. Every other ally we fight alongside has tried different ways but has settled on creating a Department for veterans affairs, and we should do the same.

Bob Stewart: I rise simply to say that we must not give the impression that Help for Heroes suddenly burst on to the scene and that no one else has helped veterans. The Soldiers Charity, the Army Benevolent Fund, the Royal Air Force Benevolent Fund—all those charities have helped for a very long time, and they will continue to support our soldiers. We must not give such an impression about the people who have helped my soldiers from 35 years ago—they are still suffering—unlike Help for Heroes, which at least to start with did nothing for my men. I just want to ask hon. Members not to say that Help for Heroes was suddenly wonderful and that everyone else had not really got on with the job. They did: they cared, and they looked after our men and women for a very long time before 2007.

Johnny Mercer: I have persistently said that in the House. I use the Help for Heroes example because I want to pay tribute to Bryn and Emma, who have recently left it, as I believe that they changed the market when it comes to veterans care. Of course those in the charity sector have carried this burden for years and years, and people such as I and my hon. Friend will be enormously grateful to them for years to come.
In closing—I will close now, because I want to give the Minister more than the four minutes I left him to respond last time—this duty is not going to go away. I am afraid my voice will not grow weaker on this matter. I apologise to my many right hon. and hon. colleagues in this place for my persistence, which must appear tedious at times, but I ask them to bear with me, for they could not have had the experiences I have had—having seen and felt the sacrifice of our armed forces day after day, far from the public gaze—and give up this torch now.
I am privileged beyond anything I could have envisaged in those days when I fought alongside members of our armed forces, and I will use and abuse that privilege until the situation changes because they deserve it. Some lost everything as the Helmand sky faded from view and their name was added to the wall at the National Memorial Arboretum. Some lost body parts they would never recover. Too many lost their minds in a process that is ongoing today. They deserve a country and a Government that care. In a world that I sometimes find so incredibly selfish and cruel, they sacrificed themselves for the greater cause in the furtherance of this great nation of ours. I have not mentioned their families: the  mother who wakes without her son, and the wife who wakes without her husband. I said this on my first day in the Chamber, and it will forever remain true:
“Theirs is the greatest sacrifice on the altar of this nation’s continuing freedom”.—[Official Report, 1 June 2015; Vol. 596, c. 375.]
We must never tire in our duty to them.
Thank you for allowing this debate tonight, Madam Deputy Speaker. I hope I will not have to repeat the exercise too many more times.

Mark Lancaster: I congratulate my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) on securing this debate. His sterling work and passion in ensuring that our veterans have the necessary support and welfare they deserve are highly commendable. As a veteran himself, he is well placed to speak in the House on their behalf. Since arriving in the Commons in 2015, he has made it his mission to campaign on this area. Although I cannot claim to be a veteran quite yet—I was described by a senior general at the Army Board last week as a “seasoned oak”, so clearly it cannot be long before I can—I do, through my rather more modest service, absolutely recognise the importance of this subject.
Equally, I am grateful to my hon. Friend for his concern about my ever-expanding portfolio, to which the reserves have been added. As a Royal Engineer, I have now been a serving member of the Army Reserve for some 28 years. I confess that I used to say that I looked far too young to have been one for so many years, but I fear that I nowadays do not look far too young. However, I do at least have some basic understanding of that brief, and I have not had to do too much background reading.
Comments have been made about the armed forces covenant—the recognition that the nation, as well as the Government, have a responsibility to ensure that our veterans suffer no disadvantage as a result of their service. There is an implication in those comments that the covenant has not been applied consistently across the United Kingdom. I have had such a concern for some time. That is why I commissioned the Forces in Mind Trust to do a review of the covenant across the United Kingdom earlier this year, and it has recently published a very extensive report that aims to share best practice.
I encourage colleagues in the House tonight to read that report and, crucially, pull out that best practice and encourage their own local authorities to follow it. There are some fantastic things happening across the UK. It will come as no surprise that the local authorities that seem to do things best are those with the greatest proportion of members of the armed forces. I take the opportunity of this debate to send the message: please spread that report far and wide, as it is the means by which we can begin to improve the level of understanding of the armed forces covenant.
The service charities have a crucial role to play. We have been supporting organisations such as Cobseo—the Confederation of Services Charities—which is an umbrella organisation for 250 charities, in its critical cluster work. I will talk about that in greater detail throughout the course of the debate.
My hon. Friend and I agree on many things, but I fear there is one on which we do not. I once again note his request for a separate Department for veterans. I can only repeat what I said in the debate in March this year, that on balance I do not believe that to be the best approach; if it meant I ended up in the Cabinet he might be able to persuade me to change my mind, but I fear it would not be me in the Cabinet. The needs of veterans straddle Whitehall boundaries and national borders because first and foremost our veterans are civilians. As I said previously, although we agree on the end, we do not necessarily agree on the means.
I fear a veterans Ministry would duplicate work that already exists through the Department of Health, the Department for Work and Pensions, the Department for Communities and Local Government and many organisations and Government agencies. I believe that the work of Defence Business Services Veterans UK provides a valuable service bringing together pensions, compensation and welfare support.

James Gray: My hon. Friend is making an important point about whether a Department for veterans’ affairs would be better for veterans or in fact worse. Does he agree that should there be such a Department that would demotivate some of the very good civil servants in the Department of Health, the Department for Work and Pensions and elsewhere who are currently thoroughly committed to the issue of veterans, as if there were to be a separate Department for veterans they might well say, “That is nothing to do with me—give that to them”?

Mark Lancaster: To a degree, this goes back to the principle of the armed forces covenant, which is really an agreement between the nation as a whole and our veterans. I would hate to think that we had moved to a position where we were in effect delegating this responsibility to a single Department and allowing others to feel that it somehow was not their responsibility to play a role in supporting our veterans.
The current system, whereby responsibility for veterans is cross-government, is positive. Yes, more should be done to ensure that all are playing their part, but on balance I agree with my hon. Friend that a dedicated veterans Department would be a retrograde step. We need not look too far, when looking at things across the Atlantic, to see some of the problems there. They are not simply financial; the very complex way in which care is given to veterans can be diluted. We also have the advantage of the national health service, which is a very comprehensive health service. That is a very good medium for supporting our veterans.

Bob Stewart: I am listening very carefully to the Minister. I also have great respect for the view of my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer). I ask this question. You are the veterans Minister—

Eleanor Laing: Order. He is the veterans Minister.

Bob Stewart: Forgive me. I am getting carried away. My hon. Friend is the veterans Minister. As the veterans Minister, I take it that you actually have fingers in other  Ministries, such as Health and Work and Pensions, and you make sure from your own efforts that veterans are well served, and you are the focus—

Eleanor Laing: Order. He is.

Bob Stewart: Forgive me—the Minister is the focus. I am getting seriously carried away—it is the fault of my hon. Friend the Member for Plymouth, Moor View. Thank you, Madam Deputy Speaker.

Mark Lancaster: I am certainly the only Minister with the word “veterans” in his title and I am certainly prepared to say that I take the lead on veterans matters. I would argue, however, that all Ministers in government should have our veterans on their mind and do what they can to support them. So, yes I am happy to take the lead, yes I am happy to have the title in my portfolio, and yes I am happy to try to ensure that all my ministerial colleagues also show the same interest. However, I would not want to be Minister with sole responsibility for veterans, for the reasons I gave when I answered my hon. Friend the Member for North Wiltshire (Mr Gray).
I recognise that the Ministry of Defence has a responsibility to ensure that the transition from service to civilian life is as smooth as possible, allowing service personnel process to draw upon the vast array of transferable skills they have obtained in service, but I am not for one second saying that there is not more that could and should be done. I believe firmly that effective transition to civilian life is a major factor in ensuring effective care. I must emphasise that most service leavers transition well to civilian life through our robust and effective resettlement system known as the career transition partnership, which in 2014-15 helped 85% of service leavers to find sustainable employment within six months.
Despite that, I recognise that there is a small percentage of service leavers who do not make a smooth transition. These are the people we must work hard to identify and support. This is also why I am keen to include a question on veterans in the national census. That will help us to identify the veteran community. I assure my hon. Friend the Member for Plymouth, Moor View that I will continue to pursue this energetically with the Office for National Statistics and the chief statistician.

Anne-Marie Trevelyan: On that note, will the Minister ensure that his Cabinet Office colleagues are fully briefed? At the end of the day, the ONS will not make the final decision—the Cabinet Office will determine that. It would be a vital marker for the future.

Mark Lancaster: We have a perfect example of why it is so important that the responsibility for veterans runs across the piece in government. As was so rightly pointed out, it is not in my power, as veterans Minister, to force the chief statistician to include this in his survey. If my hon. Friend is right, the Cabinet Office has the right to do that.
Transition is seen as a through-career management process. We are looking at different ways to ensure that from the point that people join the armed forces, they can see that they not only have the possibility of a fulfilling career but are aware that one day they will  become a civilian and need to prepare for that. Career transition should start on day one of service and we must communicate this message on the very first day an individual joins. However, where there are veterans who have difficulties in transition, the Government, local authorities and the charitable sector must step in to ensure that they are afforded appropriate support. Alongside the Government, some 2,500 service charities also play a role. Cobseo, the Confederation of Service Charities, of which many charities are a member, has also created various cluster groups to discuss important issues, such as mental health and housing, where they encourage collective working and provide a forum to raise issues and ideas to implement solutions.
To reiterate some of the points made during the debate in March on the role of charities in the veterans care sector, we value our partnership with the charitable and community sectors. They provide and address wider welfare requirements, particularly for the more vulnerable individuals in the armed forces community. Only last week at the MOD, I chaired the ministerial service charities partnership board, a meeting attended by relevant Government officials and Cobseo charities such as SSAFA, Help for Heroes and the Royal British Legion. In recognition of some of the concerns my hon. Friend raises, I reset its role with a focus on co-operation and a strategic approach to discussions, where actions are taken on current and important issues arising in the veterans sector, with a view to ensuring that the MOD, charities and other Government Departments can be held to account. I believe that accountability is important. Frankly, as the Minister with responsibility for veterans, I walk a tightrope when it comes to dealing with charities. Ultimately, I have no power to direct a charity to do anything. Charities are not responsible to Government—they are responsible to their trustees—but I believe that the Government have a role in providing leadership to try to unite the various sectors in supporting veterans. This is a role that I try to fulfil.
On the point about Help for Heroes, it was a charity that started up in 2007. The armed forces had recently re-engaged in Afghanistan and stayed for a further seven years. The support, welfare and treatment initially provided by Help for Heroes bore fruit from the horrendous injuries that our brave service personnel suffered in that conflict. Throughout those seven years and beyond, along with improvements to equipment, we have made great strides in ensuring that the best medical support is available from the MOD, charities and the NHS. I would like to take the opportunity to pay tribute to both Bryn and Emma Parry, whom I have got to know very well over the last couple of years, and thank them for all their service in leadership of this charity. I wish them well for the future.

Jim Shannon: I had a meeting with a Department for Environment, Food and Rural Affairs Minister, which is why I could not attend this Adjournment debate any sooner.
In Northern Ireland, about 100 veterans have tried to commit suicide over the last year and a half, mainly those who served in Afghanistan. Those veterans are not with any charity or regimental association—they are under the radar. What can be done to reach those  people that nobody knows about, but who have been affected very greatly by what they saw during their service in Afghanistan?

Mark Lancaster: I intend to visit Northern Ireland shortly. For obvious reasons, I appreciate that there is a unique set of circumstances over there, and I am determined to do my bit to address them. Of course, communication is the key. I shall explain in a few moments how I believe we can help, but the key is making sure that support services are available and communicated. All too often, help is out there, but it is not clear how our veterans access it. I intend to say a few words about that if the hon. Gentleman will bear with me.
I informed the House earlier this year of a plan to improve the care received by the most seriously injured and highly dependent service personnel and veterans. Currently, this support is funded and delivered by a number of separate agencies, including the MOD, the NHS, local authorities and charitable organisations. As such, we have a pilot, which is ongoing, that sees care of this kind co-ordinated and delivered by a new integrated high-dependency care system—I think we need a better name. It produces a joined-up and improved system of care for the individual, reducing strain on local care commissioning groups. The early signs are that this is going well. I am happy, once it is established, to see how to extend it to a wider cohort of veterans.

Michael Tomlinson: On that very point, I invite the Minister to look at the Dorset model—I mentioned a few moments ago the work that Andy Gritt is doing in this area—to see whether it can feed into the model that the Minister has just mentioned.

Mark Lancaster: I would be delighted to look at that model and see whether we can learn any lessons from it.
The aim is that this system will provide confidence for a small number of individuals and their families that their clinical, health and social support needs will continue to be met when they leave the armed forces and for the rest of their lives.
On the point about a single point of contact for veterans, I have good news for my hon. Friend the Member for Plymouth, Moor View. The armed forces covenant fund has £10 million each year to support the covenant by funding projects that address specific priorities, one of those being the creation of a veterans gateway. The aim of this initiative is to provide a single point of contact via a fully transactional website and one telephone number, together providing an information clearing house that takes into account the needs of all veterans, wherever they may be located. An announcement will be made very shortly on the preferred bidder for this contract, with this facility being launched during 2017. Further to that, there is the armed forces covenant website itself, which both serving and former serving personnel may access.
I am the first to recognise that the support of our veterans and the services that are provided for their welfare are not perfect. Nothing is, but I, like my hon. Friend, and indeed all hon. Members here tonight—it is a very good showing for an end-of-day Adjournment debate—am determined to do more. For example, the Department for Communities and Local Government is doing important work on supported housing, ensuring  that local authorities have afforded priority where it is due. The DCLG has also introduced various measures to improve access to social housing for members of the service community, including veterans. That includes changing the law to ensure that local authorities always give seriously injured service personnel and veterans with urgent housing needs high priority in the provision of social housing. As for health, NHS England is introducing new initiatives in mental health services for veterans, the details of which contain expert input from MOD officials. Those are just a few examples of the collaborative work that we are undertaking throughout the Government.

Maria Caulfield: May I make a plea on behalf of NHS workers? Veterans care is a very specialised area, and doctors, nurses and other staff need training and support if they are to care for veterans adequately. We have a great deal to learn from veterans. For example, the McIndoe Centre in East Grinstead was established because of the need to look after veterans who were returning from warfare, and that has benefited the country as a whole.

Mark Lancaster: I entirely agree with my hon. Friend. The issue of veterans healthcare is crucial, and I have been looking into the issue of veterans mental health care in particular. I am delighted to see that my hon. Friend the Member for South West Wiltshire (Dr Murrison) has just entered the Chamber. His report “Fighting Fit” involved a great deal of work, and I am pleased to say that we have implemented nearly all his recommendations. Vital work is now being done to enable the medical records of service personnel to be transferred to the civilian national health service so that we can effectively track our veterans.
We must ensure, from the day people join the services until the day they leave, that they are ready for the transition to the civilian world, and collaboration and co-operation are key elements of that. We must continue to work with other Departments, with local authorities and with the charitable sector to build on what we have achieved thus far.
Once again, I thank my hon. Friend the Member for Plymouth, Moor View for raising this important issue.

Johnny Mercer: I sense that my hon. Friend is beginning to wind up his speech. Before he does so, let me thank him for his response, and also point out that it is  imperative, as far as Conservative Members are concerned, that we do everything on the basis of the evidence that is presented to us. We can talk persistently about the fact that the armed forces covenant is working or about veterans care, but it is clear from the strength of the attendance in the Chamber this evening and from the stories that emerge each week that the current system is not working as well as it should.
I understand why my hon. Friend dismissed my proposal for a Department for Veterans Affairs, but such Departments work elsewhere. My proposal is not based on the United States model; it is completely different. I ask him not to close his mind to the concept, because I think that until we do something like that and fundamentally change the present position, we will not stop the haemorrhage of bad veterans care in this country.

Mark Lancaster: Let me say two things to my hon. Friend. First, I do not think that it is just Conservatives who care passionately about this issue; I am confident that Members on both sides of the House care passionately about it, and I have been greatly encouraged by the positive co-operation and constructive support for progress that I have observed on the part of Her Majesty’s loyal Opposition. I hope that that continues, and I am sure that it will. Secondly, I do not have a closed mind about anything. I would like to think that during my tenure as veterans Minister to date—given that I have just praised Her Majesty’s loyal Opposition, it may well come to an end quite shortly—I have demonstrably tried to take a fresh approach to a number of issues, including mesothelioma. I have looked at issues again, and I am currently looking at a couple of issues that are in my inbox.
I do not have a closed mind. All I am saying is that at the moment, on balance, I do not believe that my hon. Friend’s suggestion constitutes the right approach. We have heard this evening about how other areas of government can contribute effectively to the care of our veterans. I also feel—this point was made by my hon. Friend the Member for North Wiltshire—that we should not allow the other areas of government, and society, to feel that responsibility for our veterans has somehow been delegated to a small part of government. I believe—at the moment, on balance—that that would be a mistake.
Question put and agreed to.
House adjourned.